CORPORATE STORY ON

“APPLE”

Presented By MANENDRA

SHUKLA

INTRODUCTION

•Founder - Steve Jobs and Steve Wozniak founded apple computer inc. in 1976.

•Incorporated in 1977

•In 2007 named changed to Apple inc.

•Vision and Mission

LOGO HISTORY

The original The Rainbow logo The logo reinvented

Objectives and Goals Over the next 3-4 years Apple would like

to increase their product accessibility (new stores).

Increase their market share by 30%.

Eliminate the need for new products in order to raise sales.

WHY APPLE ?

FINANCEMARKETI

NGOPERATIONS

From Financial point of view

• Net sales has been increased almost near to 300% within 4 years.

• Net income has been increased by almost 429% within 4 years.

• EPS has been raised almost 4 times.

From Operations point of view

Apple as the company with best supply chain practices in the

world for the third year running.

From Marketing point of view

HUMAN RESOURCE

ORGANIZATIONAL STRUCTURE

Recruitment policy Compensation policy( individual reward)

Training

APPLE MARKETING strategies

Apple’s Design Process

“When you first start off trying to solve a problem, the first solutions you come up with are very complex, and most people stop there. But if you keep going, you can often times arrive at some very elegant and simple solutions.” -Steve Jobs

VISION: Apple identifies needs and use cases to make decisions about function and technologies.

FOCUS: Drops 20 % of non-required functionalities to perfectly design 80 % of key user needs.

STRATEGIES

• Promotional Technique: – Surprise element in each product launch.– heavy speculation and curiosity regarding the

product .• Positioning:– hype surrounding Apple product was created due

to its unique advertising, word of mouth publicity by the users and the look and design of the product.

• SELL AT PREMIUM:

STRATEGIES

• LOCK THE CUSTOMER IN: 125 m iTunes accounts linked with credit card.

• CROSS SELLING THE PRODUCT LINE:– Product line covers all markets, all price ranges,

all needs with an accurate segmentation. – The iCustomer needs all Apple products to

maximize his user experience.– Integration reinforced by retail strategy. Apple

Stores fosters the brand appeal and consequently, the halo effect.

• THINK DIFFERENT: Fostering new Apple environment.

COMPUTING:

• Strategic Move:– By moving to Intel processors in 2006, it became

possible to run Windows easily on Mac.• High- End Consumers:• iMac has 9% market share but it accounts for

90% of dollars spent on computers.• Unlike Windows viruses are almost

nonexistent in Mac universe.

MUSIC REVOLUTION

SMART PHONE

• Global Launch:– Penetration in US market.– Subsidized Handsets.– Colaboration with AT&T.– Higher profit due to more ARPU.

iPhone India: Has Apple dialed the wrong number?

• Skiming the Indian market.• Colaboration with Vodafone, Airtel.• Reasons behind failure in Indian market.

With the iPod, Apple Generated A New Environment to Experience the Music (“Music Access and Listening” Experience Environment)

COMPETITIVE ADVANTAGE

SIMPLICITY: Technical complexity hidden behind slick and intuitive user interface gives seamless experience.

QUALITY: Thanks to hardware and software tight integration Apple’s product offers great quality.

INNOVATION: Apple does not depend on its suppliers’ technical breakthroughs. It can innovate on hardware and software at its own pace.

PERFORMANCE OF THE COMPANY

How did Apple beat Google & Microsoft?

Revenue Distribution:

• The iTunes Store represented only 11 % of Apple’s revenues in 2009.

• iPhone (hardware) sales represented 22 % of Apple’s revenues that amounts to $6.8 bn.

• 40 % of Apple revenues comes from Mac sales (desktop and laptop).

• Revenue of $400 m that is less than 1% of total revenue generated by App Store sales since its creation.

Microsoft ----Google ----Apple ----

In 6 years, Apple’s market cap outweighed both the new and old tech champions

Computer sold in units

2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

2

4

6

8

10

12

14

Million

Million

Apple’s Retail Stores Stand Out And Have Been Highly Successful

• 160+ retail stores

• Revenue per square foot: $2,489

• Compared with $971 per square foot at Best Buy.

External Audit

Opportunities Increase in worms and viruses

on PCs. Large population (Gen X&Y)

which are extremely individualistic and name brand conscious.

Downloadable music and MP3 players are highly marketable.

Increase sales of computers online by 25 percent.

Increase sales of laptops by 20 percent.

Threats Companies not seeing Apple as

compatible with their software. Dell and HP are major

competitors. Increasing competition with

music downloads. Dell does not invent but

provides computers at a more cost effective rate for customers.

Strict product control and vertical diversification.

Internal Audit

Strengths iTunes Music Store is a good source

of revenue, especially with the iPod and the availability on Windows platform.

Developing own software and hardware.

Apple’s niche audience provides the company with some insulation from the direct price competition.

Revamping desktop and notebook lines.

Web technology can be used to improve product awareness and sales.

Low debt—more maneuverable. Good brand loyalty.

Weaknesses Weak relationship with Intel and

Microsoft. Weak presence in business arena. Dependency on new product launches. Weak presence in markets other than

education and publishing. Slow turn around on high demand

products.

SWOT Matrix

S-O Strategies Increase awareness through the

web of the immunity of Mac products to worms and viruses.

Advertise using individuals that will link Generation X & Y to the iTunes and other related products.

Using movies and music groups that are geared towards Gen X and Y to promote computers and laptops.

S-T Strategies Increase and promote the

compatibility to Window operating system.

Promote the originality of Apple computers and the different style and stable system that is slightly more but worth the price difference in style, stability and speed.

W-O Strategies Increase ties with Microsoft and

Intel and their products. Promote to business the safety of

having a worm and virus free computer by using Mac.

W-T Strategies Improve relationship with

Microsoft and Intel so that companies will see them as compatible.

Increase productivity and turn around of high demand products to compete with Dell and HP.

SWOT MATRIX

Apple’s Marketing LessonsMake the customer king

Apple customers have tremendous brand loyalty.

Mac users (Mac Marines) would protest to journalists who wrote derogatory articles about the iPod’s shorter than expected battery life that many journalists would avoid writing about Apple's struggles altogether.

Mac User Groups were vocal in their attempt to keep Apple executives focused on quality when they perceived the company was lowering its standards.

Apple patrons feel as if they are part of a community - the result of the "us against them" mentality. Customers are loyal and have a sense of independence and an anti-establishment perspective.

Apple’s Marketing LessonsBreak the marketing mould

Company mottoJobs did away with “Big Box” storesOpened 1st retail store in Virginia in 2001June 2008 - 215 storesGlobal chains (Australia, Canada, China, Italy, Japan, UK)Retail strategy a huge success - the “Nordstrom of technology”1997 Macworld Expo Conference that Apple would be selling Microsoft 5% of the company for a $150 million, and be working with their archrival on new projects (Microsoft)

APPLE’s – LOGISTICS AND SUPPLY CHAIN

SUPPLY CHAIN MANAGEMENT - MAIN COMPONENTS

Apple's supply chain judged best in world again

A report by AMR Research has named Apple as the company with best supply chain practices in the world for the third year running. In a feature exploring the secret behind Apple’s success, it was found that company’s ability to bring together two sides of the supply chain (digital and physical) efficiently and at increasingly low cost.

Digital supply chain is a new media term that encompasses the process of the delivery of digital media, be it music or video, by electronic means from the point of origin (content provider) to destination (consumer).

The main processes of a digital supply chain are as follows:

1.) True on-demand product availability

2.) Ease of use and speed for content search and activation.

3.)Pricing and subscriptions

4.) Quality management built on licensing and refunds

APPLE iPHONE SUPPLY CHAIN

From a high-level, we speculate that the following are the material suppliers of the Apple iPhone:

Samsung: The Singapore facility manufactures CPU and Video processing chips. Infineon: The Singapore facility manufactures Baseband Communications hardware. Primax Electronics: The Taiwan facility manufactures Digital Camera Modules. Foxconn International: The Taiwan facility manufactures internal circuitry.

Entery Industrial: The Taiwan facility manufactures connectors.Cambridge Silicon: The Taiwan facility manufactures bluetooth chipsets.Umicron Technology: The Taiwan facility manufactures printed circuit boards.

•Catcher Technology: The Taiwan facility manufactures stainless metal casings.

•Broadcomm: The U.S. based facility builds touch screen controllers.

•Marvell: The U.S. based facility builds 802.11 specific parts.

China facility assembles the hardware, holds inventory, and handles the pick, pack, and ship steps of the fulfillment process.

The iconic iPod and iPhone maker took the top spot due to "an intoxicating mix of brilliant industrial design, software interfaces and consumable goods that are purely digital”.

BENEFITS APPLE GOT FROM ITS SUPPLY CHAIN:-

Cost

Reduced inventories Reduced waste Reduced total manufacturing costs Service Establishment of a collaborative framework Near real time information flow

CHINA -THE ASSEMBLY HUB OF APPLE

“LIFE BLOOD AND NERVE CENTRE OF BUSINESS”

FINANCE

2007 2008 2009current assetscash and cash equiv 9,352 11,875 5,263short term marketable securities 6,034 10,236 18,201Accounts Receivable, Net 1,637 2,422 3,361Inventories 346 509 455Deferred Tax Assets 788 1,044 1,135Other Current Assets 3,544 3,920 3,140Total Current Assets 21,701 30,006 31,555

Long-Term Marketable Securities 2379 10528Property, Plant and Equipment, Net 1832 2455 2954Goodwill 38 207 206Acquired Intangible Assets, Net 299 285 247Other Assets 1008 839 2011Total Assets 24878 36171 47501

Current Liabilities:Accounts Payable 4970 5520 5601Accrued Expenses 3023 4224 3852Deferred Revenue 1113 1617 2053Total Current Liabilities 9106 11361 11506

Deferred Revenue - Non-Current 554 768 853Other Non-Current Liabilities 687 1745 3502Total Liabilities 10347 13874 15861

Shareholders' Equity:Common Stock 5368 7177 8210Retained Earnings 9100 15129 23353

Accumulated Other Comprehensive Income/(Loss) 63 -9 77Total Shareholders' Equity 14531 22297 31640

Total Liabilities and Shareholders' Equity 24878 36171 47501

Balance sheet of apple (in million $)

2007 2008 2009

current assetscash and cash equiv 37.59% 32.83% 11.08%short term marketable securities 24.25% 28.30% 38.32%Accounts Receivable, Net 6.58% 6.70% 7.08%Inventories 1.39% 1.41% 0.96%Deferred Tax Assets 3.17% 2.89% 2.39%

Other Current Assets 14.25% 10.84% 6.61%Total Current Assets 87.23% 82.96% 66.43%

Long-Term Marketable Securities 6.58% 22.16%Property, Plant and Equipment, Net 7.36% 6.79% 6.22%Goodwill 0.15% 0.57% 0.43%Acquired Intangible Assets, Net 1.20% 0.79% 0.52%Other Assets 4.05% 2.32% 4.23%Total Assets 100.00% 100.00% 100.00%

Current Liabilities:Accounts Payable 19.98% 15.26% 11.79%Accrued Expenses 12.15% 11.68% 8.11%Deferred Revenue 4.47% 4.47% 4.32%Total Current Liabilities 36.60% 31.41% 24.22%

0.00%Deferred Revenue - Non-Current 2.23% 2.12% 1.80%Other Non-Current Liabilities 2.76% 4.82% 7.37%Total Liabilities 41.59% 38.36% 33.39%

Shareholders' Equity:Common Stock 21.58% 19.84% 17.28%Retained Earnings 36.58% 41.83% 49.16%Accumulated Other Comprehensive Income/(Loss) 0.25% -0.02% 0.16%Total Shareholders' Equity 58.41% 61.64% 66.61%

Total Liabilities and Shareholders' Equity 100.00% 100.00% 100.00%

Common size statement for the year ended

2007 to 2008 2008 to 2009

current assets inc/dec inc/dec (per) inc/dec inc/dec(per)cash and cash equiv 2,523 26.98% -6,612 -55.68%short term marketable securities 4,202 44.93% 7,965 67.07%Accounts Receivable, Net 785 8.39% 939 7.91%Inventories 163 1.74% -54 -0.45%Deferred Tax Assets 256 2.74% 91 0.77%Other Current Assets 376 4.02% -780 -6.57%Total Current Assets 8,305 88.80% 1,549 13.04%

Long-Term Marketable Securities 2,379 25.44% 8,149 68.62%Property, Plant and Equipment, Net 623 6.66% 499 4.20%Goodwill 169 1.81% -1 -0.01%Acquired Intangible Assets, Net -14 -0.15% -38 -0.32%Other Assets -169 -1.81% 1,172 9.87%Total Assets 11,293 120.75% 11,330 95.41%

Current Liabilities:Accounts Payable 550 5.88% 81 0.68%Accrued Expenses 1,201 12.84% -372 -3.13%Deferred Revenue 504 5.39% 436 3.67%Total Current Liabilities 2,255 24.11% 145 1.22%

0.00% 0 0.00%Deferred Revenue - Non-Current 214 2.29% 85 0.72%Other Non-Current Liabilities 1,058 11.31% 1,757 14.80%Total Liabilities 3,527 37.71% 1,987 16.73%

0.00% 0 0.00%Shareholders' Equity: 0.00% 0 0.00%Common Stock 1,809 19.34% 1,033 8.70%Retained Earnings 6,029 64.47% 8,224 69.25%Accumulated Other Comprehensive Income/(Loss) -72 -0.77% 86 0.72%Total Shareholders' Equity 7,766 83.04% 9,343 78.68%

Total Liabilities and Shareholders' Equity 11,293 120.75% 11,330 95.41%

Comparative Balance sheet(Amount in million $)

2007 2008 2009

Net sales:Domestic $14,683 $20,893 $22,325 International 9,895 16,598 20,580Total net sales 24,578 37,491 42,905

Costs and expenses:Cost of sales 16,426 24,294 25,683Research and development (R&D) 782 1,109 1,333Selling, general and administrative (SG&A) 2,963 3,761 4,149Total Operating Expenses 3,745 4,870 5,482Operating income 4,407 8,327 11,740Other income and expense 599 620 326income before provision for income taxes 5,006 8,947 12,066Provision for income taxes 1,511 2,828 3,831

Net income 1,511 $6,119 $8,235

Income statement

2007 2008 2009

Net sales:

Domestic 59.74% 55.73% 52.03%

International 40.26% 44.27% 47.97%

Total net sales 100.00% 100.00% 100.00%

0.00% 0.00% 0.00%

Costs and expenses: 0.00% 0.00% 0.00%

Cost of sales 66.83% 64.80% 59.86%

Research and development (R&D) 3.18% 2.96% 3.11%

Selling, general and administrative (SG&A) 12.06% 10.03% 9.67%

Total Operating Expenses 15.24% 12.99% 12.78%

Operating income 17.93% 22.21% 27.36%

Other income and expense 2.44% 1.65% 0.76%

income before provision for income taxes 20.37% 23.86% 28.12%

Provision for income taxes 6.15% 7.54% 8.93%

0.00% 0.00% 0.00%

Net income 6.15% 16.32% 19.19%

Common size income statement

2007 tO 2008 2008 t0 2009

inc/cec inc/dec(per) inc/dec inc/dec(per)

Net sales:

Domestic $6,210 42.29% $1,432 6.85%

International $6,703 45.65% $3,982 19.06%

Total net sales $12,913 87.95% $5,414 25.91%

$0 0.00% $0 0.00%

Costs and expenses: $0 0.00% $0 0.00%

Cost of sales $7,868 53.59% $1,389 6.65%

Research and development (R&D) $327 2.23% $224 1.07%

Selling, general and administrative (SG&A) $798 5.43% $388 1.86%

Total Operating Expenses $1,125 7.66% $612 2.93%

Operating income $3,920 26.70% $3,413 16.34%

Other income and expense $21 0.14% ($294) -1.41%

income before provision for income taxes $3,941 26.84% $3,119 14.93%

Provision for income taxes $1,317 8.97% $1,003 4.80%

$0 0.00% $0 0.00%

Net income $4,608 31.38% $2,116 10.13%

Comparative income statement

RATIO ANALYSIS:

ratios 2007 2008 2009

Current ratio 2.38 2.64 2.74

Net profit ratio 6.15 16.32 19.19

Operating profit ratio

17.93 22.21 27.36

2004.5 2005 2005.5 2006 2006.5 2007 2007.5 2008 2008.5 2009 2009.50

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EPS

EPS

EARNING PER SHARE

Over view about the company

THANK YOUAnd start thinking different from today…..