APPLE INC. ANALYSIS
Apple Inc. is a public company established in America that producesadvanced computer software and electronics. The company is dedicatedto promoting personal experience to various individuals such asconsumers and students across the world. Apple Inc. providesinnovative software, internet, and hardware to users that facilitatethe development of computing products and experience (Lashinsky,2012). The company has expanded into various countries and makesproducts such as iPad and iPhone. Despite the competitiveenvironment, the company has emerged as a market leader inelectronics. The paper discusses Apple Inc. business, its financialperformance, and gives predictions of its future activities.
AppleInc. manufactures electronics and computer software and through itsinnovative works, the company has become a world leader in thesector. Some of the items that the company designs, develops andmarkets include computers, media devices, and music players. Also,the company offers services, software, networking solutions, andaccessories related to the items produced. Apple Company is dividedinto various product lines which include iTunes, iPad, iPod,services, Mac, iPhone, products, and accessories (Lashinsky, 2012).The Apple Inc. business entails delivering applications and digitalmaterial in various online stores, direct sales force, and retailstores that are accessible by customers worldwide. The companybusiness targets consumers, government and private enterprises, andmid-sized and small businesses. The fiscal year for Apple Inc. is 52or 53-week duration. The business strategy that the company utilizesinfluences its exclusive development and design abilities to ensurecustomer satisfaction. The company focuses on fostering the bestconsumer experience using its innovative services, software, andhardware (Lashinsky, 2012). One component of the company’s strategyis to advance business platform for discovery and provision ofdigital content using iTunes store. Apple Inc. iBooks and App storesenable customers to find and download books and applications usingdevices such as computers. Moreover, the business strategy involvesthe expansion and development of both retail and onlinedistributions, and enhancing the distribution network of its thirdparty. The company ensures that customers are reached, andhigh-quality support and sales are provided.
The organization of the Apple Inc. business is mainly managed on ageographical basis. The operating segments of the company considerthe location and characteristics of the customers and include Europe,Japan, Retail, and Great China. The services provided in the varioussegments are similar. Also, the software and hardware products soldat the segments do not differ. Product services and support are alsooffered in each segment across the world. Leadership is a componentthat influences the organization of Apple’s business and operations(Lashinsky, 2012). Good leadership is established in the company andis enhanced by the successful communication channels such as emails.The relationship between the customers and other stakeholders ismanaged using various strategies. Frequent feedbacks are collectedand used to advance processes and implement changes in servicedelivery. The company utilizes a top to a bottom organizationalstructure whereby the people at the highest rank have the highestauthority. However, when conducting business, the customers are giventhe highest priority and their demands must be satisfied.Distribution and marketing in Apple Inc. target education, consumer,government, and enterprise markets. When performing businesstransactions, the company sells its items and resells items producedby third parties in the markets. The sales are either done directlyto consumers in online or retail stores and using direct sales force.Moreover, Apple Inc. uses indirect distribution methods such aswholesalers, network carriers, value-added resellers, and retailers(Lashinsky, 2012).
Theadvancement of the distribution centers aims at minimizing the gapbetween the consumers and the company by ensuring direct interaction.The retail stores for Apple Inc. are developed at highly populatedlocations such as shopping malls to ensure that many customers canreach them. The design of the stores is made in a way that promotesand simplifies advertisement and presentation of products, orsolutions. Programs that facilitate reseller transactions are alsoemployed to place merchandising materials, fixtures, and otherresources in locations owned by third parties.
The company faces competition in all sections of its business, andthe market is highly competitive. The Apple Inc. markets areassociated with continuous changes of technology and establishmentsof new products. The low switching cost of customers from Applebrands to the competitor`s brands is a big blow to its business. Thebargaining power of the buyers is high and hence hinders the successof the Apple’s business. Moreover, there exists a threat ofsubstitute, which negatively affects the company’s business(Lashinsky, 2012). Some of the buyers are not fully developed hencepurchase products in a small amount. Existing in such a competitiveenvironment is challenging since the competitors lower prices orproduct margins with the aim of acquiring wide market share. Thecompany, however, employs its business strategy to stay top in themarket. For instance, the company produces new technologies,services, and products, and advances the existing services andproducts. Apple Inc. recorded high net sales between the year 2008and 2009 when its iPhone and iPhone services gained popularity in themarket. The company’s income increased from about 1,844 milliondollars to approximately 6,754 million dollars. The introduction ofthe 3rd generation of iPhone and support softwareinfluenced the performance and usage of iPhone.
Thedemand for the Apple Inc. products, support, and services was high in2009. The sales of Apple increased by 78% in the year 2009 comparedto the previous year (Haslam et al., 2013). Moreover, in thesame years (2008-2009), Apple Inc. gained high profits fromtransactions of iTunes Store. Double-digit growth is associated withthe increase in sales.
The financial performance of Apple Inc. for the third quarter of theyear 2016 showed that the company acquired quarterly returns of 42.4billion dollars. The net income of Apple in the quarterly period was7.8 billion dollars. Comparing the previous years, there is anincrease in the financial gains in the company. The gross margin, forinstance, increased from 38% to 39.7%. Moreover, the sales done inthe international markets intensified making 63% of the totalquarterly revenue. Having acquired a wide market share, the companyis likely to enjoy high performance in the coming years. The brandname for Apple Inc. is well known, and customers trust its products(Haslam et al., 2013). International markets have recentlybeen established, and the company’s services and products areattracting new customers. However, the company faces performancechallenge initiated by increasing competition.
Saleshave minimized since companies such as Hp, and Dell are offeringproducts that are of the low price. The brand name and wide marketshare of Apple make it counter the stiff competition and still stayat the top.The financial ratios for Apple Inc. vary from one annualyear to another. The company improves the current ratio by ensuringthat the current liabilities are paid all the time and in time. Sweepaccounts are also used to increase the current ratio whereby fundsare moved from accounts with low interest to high interest accounts.
AppleInc. enjoyed high current ratio from 2012, which was initiated by theminimized current liabilities (Haslam et al., 2013).Quickratio of the company is enhanced using the same procedure applied forcurrent ratio. However, Apple Inc. practices long-term financinginstead of using cash on hand method to purchase or sell assets as away of improving quick ratio.
Apple has planned and prepared for the future and is not satisfiedwith the current achievements. The software and electronic market isgrowing gradually due to technological advances. The company isexpected to work on its current products such as iPhone to make surethat they gain more market share. Based on market analysis, theiPhone is expanding and going forward since the company is doinggreat in various parts of the world (Bergvall-Kåreborn &Howcroft, 2013). The company will focus on the new market demands andis dedicated to delivering more advanced smartphones in coming years.Customer satisfaction, attraction, and retention are the keyobjective of Apple Inc. The company will help customers to switch tousing the new products and target on the new markets. Apple Inc. isassociated with a diverse product line that is seen to be obsolete. Furthermore, competition has intensified making it difficult forApple Inc. to achieve its goals. Competitors have concentrated andinvested in the electronics and software and they are developingportable products increasing competition in the market. Apple Inc.,therefore, will be required to develop strategies to deal with theincreasing competition. Since the competition is concentrated infunctionality, product design, and affordability, Apple Inc. isrequired to differentiate itself further (Bergvall-Kåreborn &Howcroft, 2013). Differentiation will ensure that Apple introducesproducts that are unique from its competitors. Innovation isimplemented effectively in the company making it a world innovationleader. The company is, therefore, likely to utilize innovation toexpand markets and gain profits.
The company is also expected to advance its international strategyto ensure that it succeeds in the global markets. Online marketing isan effective method that Apple Inc. had adopted. However,technological changes will demand the company to adjust to the newonline marketing strategies so as to stay top in the market. Thequality of the products to be produced by the company will beadvanced by next year. Experienced staff members and highlytechnological resources will be acquired to facilitate innovation inthe company. The company will be focused on increasing the sales andgaining more profit (Bergvall-Kåreborn & Howcroft, 2013). Newsoftware and electronic components will be produced based on themarket demands. A centralized control mechanism will be implementedthat will coordinate and monitor the product and service pricing inthe diverse markets.
In conclusion, Apple Company is one of the manufactures ofelectronics and computer software that has gained a wide market shareglobally. The development of quality and technologically advancedproducts and services make the company popular. The company hasestablished itself on both international and local markets.Distribution channels such as retail stores and iStores have beenestablished that help the company to market its products andservices. The performance of Apple Inc. has been high since 2008 whenits iPhone and iPhone services gained customer attraction. As aresult, the company gained high profits from the sales of the iPhoneproducts. Customer satisfaction is the main goal of the company, andit achieves the goal through innovative practices. In future, thecompany is expected to develop new products that match the marketdemands. Moreover, Apple Inc. may also introduce creation of newtechnologies that helps businesses to function or exist. A strategythat focuses on the growth of the company is to be implemented forsuccessful implementation of changes. The company will keep up todate will technological advances to ensure that it keeps itscustomers at a move.
Bergvall-Kåreborn, B., & Howcroft, D. (2013). The Apple businessmodel: Crowdsourcing mobile applications. In Accounting Forum(Vol. 37, No. 4, pp. 280-289). Elsevier.
Haslam, C., Tsitsianis, N., Andersson, T., & Yin, Y. P. (2013).Apple`s financial success: The precariousness of power exercised inglobal value chains. In Accounting Forum (Vol. 37, No. 4, pp.268-279). Elsevier.
Lashinsky, A. (2012). Inside Apple: How America`s most admired-andsecretive-company really works. New York: Business Plus.