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Apple Computer

Apple Computer. Team 4: Richmond Bautista, David Broggie , Scott McLaughlin, Michael Stewart, Austin Wakeman , Evan Wong. Founding and Initial Products. Apple’s Beginning Established April 1, 1976 by Steve Jobs and Steve Wozniak Initial Products

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Apple Computer

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  1. Apple Computer Team 4: Richmond Bautista, David Broggie, Scott McLaughlin, Michael Stewart, Austin Wakeman, Evan Wong Team #4/Spring 2009

  2. Founding and Initial Products • Apple’s Beginning • Established April 1, 1976 by Steve Jobs and Steve Wozniak • Initial Products • The Apple I was first offered in July 1976 for $666.66 • The Apple II was introduced in 1977 for $1,200 Team #4/Spring 2009

  3. Development and Growth • Apple is considered a trendsetter in innovation and creativity in personal computers • Shifts in lines of business • The iPod was introduced on October 23, 2001 • The iPhone first became available on June 29, 2007 Team #4/Spring 2009

  4. Innovation Affecting Stock Price Team #4/Spring 2009

  5. SWOT Analysis • STRENGTHS • Apple has a great source of brand loyalty • The favorable brand perception has increased sales of Macintosh computers • Innovation is one of Apple’s key strengths • It is the first large personal computer company to develop a graphical based computer • Apple products are simple to use and appeal to a wide market Team #4/Spring 2009

  6. SWOT Analysis • STRENGTHS (Continued…) • Apple Company has complete control over its products • Manufactures the products and the operating systems in which they process • The invention of the iPod has given Apple a wider selection of market segments • iTunes and the Apple On-line store has helped increase the company profits Team #4/Spring 2009

  7. SWOT Analysis • WEAKNESSES • Apple iPods were difficult to maintain • Its sensitive screen leads to easy breakage • Faulty batteries • There is pressure to increase the price of its music download files • Many music companies make more money off of iTunes than from their original CD sales • Predicting the demand and the ability to deliver enough machines to satisfy the demand in a short period of time Team #4/Spring 2009

  8. SWOT Analysis • WEAKNESSES (Continued…) • Apple has higher Research and Development costs than its competitors • In 2005, Apple ended its relationship with IBM as a chip supplier • Switched to Intel • The switch could potentially confuse Apple's consumers Team #4/Spring 2009

  9. SWOT Analysis • OPPORTUNITIES • Apple has constantly been able to create new and updated products/software such as iPhones, Macbooks, iPod Touches, and iPodNanos • Has the opportunity to develop its iTunes and music player technology into a mobile phone format • This enables its users to keep track what songs have been used and bought • Podcasts are free to subscribe to, which enable its customers to listen to radio shows on their iPod Team #4/Spring 2009

  10. SWOT Analysis • THREATS • The continuing technology updates on other computer companies • Sony, Dell, and HPs are constantly updating their computer technologies • The popularity of Apple Mac and iPod are subject to demand, and will be affected if economies begin to weaken and demand decreases for their products. • Substitute products can lead to the replacement of Apple products because of pricing Team #4/Spring 2009

  11. SWOT Analysis Conclusion • Apple Company seems to have a stable positioning • The company’s strengths seem to outweigh its weaknesses • The continuation of its updates and opportunities can easily increase its customer loyalty • The threat of other competitors can push Apple to continue upgrading their products Team #4/Spring 2009

  12. External Environment • Opportunities • Businesses and Education were utilizing the use of computers, so the Apple II line fulfilled this new customer set • Apple sought out the music industry to allow them to make their music legally downloadable • Apple created their own retail store to push their own products Team #4/Spring 2009

  13. External Environment cont’d • Threats • IBM, amongst other companies, began to seize market leadership over Apple • The high cost structure limited Apple’s ability to expand its market share • The creation of the iPod led competitors to sell their own version of an MP3 player Team #4/Spring 2009

  14. Porter’s Five Forces • Substitute Products • Companies had the ability to create their own computers to compete with Apple • The iPod is constantly battling with other similar products to maintain superiority • Differentiation has helped Apple hold its appeal to consumers Team #4/Spring 2009

  15. Mission and Goals The goal of Apple “in a nutshell, is to obtain stellar products and services within tight timeframes, at a cost that represents the best possible value to our customers and shareholders.” Apple’s mission statement is closely tied to their main goal and makes it possible. Team #4/Spring 2009

  16. Corporate-level Strategy • The lines of business in Apple can be broken down into three categories: • Computer segment • Consumer electronics segment • Software segment • Apple is a rarity in their line of business because they make both the hardware and software of their products. Team #4/Spring 2009

  17. Corporate-level Strategy • Subsidiaries and acquisitions of Apple • Mainly feed into parent company (Apple) • Acquisition of PA Semi ($278 million) • Is Apple simply a company that runs a portfolio of investments? • Is Apple’s corporate strategy appropriate? • Yes, as the business environment of technology is constantly evolving. • Aggressive expansion and acquisitions of other companies that could provide a competitive edge are extremely important. Team #4/Spring 2009

  18. Corporate-level Strategy • Has Apple’s corporate strategy changed over time? • Yes. One must remember the humble beginnings of “Apple Computer,” now known as Apple Inc. • What products have contributed most to Apple’s competitive advantage? • Before: iMac, iBook, original iPod and iTunes • Now: iPod(s), iPhone, iTunes music store, application store for iPod touch and iPhone, bundled software such as iLife Team #4/Spring 2009

  19. Competitive Advantage = High Sales Team #4/Spring 2009

  20. Business-level Strategy • Business model • Originally pursued focused differentiation • Currently pursues product differentiation • Investment strategy • Growth strategy • Attempting to maintain their competitive position • Functional strategies • Innovation • Quality Team #4/Spring 2009

  21. Business-level Strategy • R&D has successfully developed the proper distinctive competencies • Biggest threats • Threat of substitutes • Intensity of rivalry among established firms • Apple can deal with these threats • Maintain brand loyalty • Continue being the leader in innovation Team #4/Spring 2009

  22. Structure and Control System The Original Intention Small business Hired experience Decentralizing Michael Sculley Apple goes public (1980) Bringing the company closer Team #4/Spring 2009

  23. Structure and Control System • Focused Differentiation to Broad Differentiation • MS-DOS/Windows • Steve Jobs • Refined the innovation after multiple CEOs failed • Retail stores, iPod, iTunes, iPhone • No politics Team #4/Spring 2009

  24. Recommendations • Lower prices to reflect internal components after products (computers) are outdated, and/or update internal components more often • Produce low-cost netbook to compete with current PC offerings • Retail store expansion • Continue innovation • Continue updating iPod and iPhone Team #4/Spring 2009

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