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Apple Business Strategy Essay

4575 words - 19 pages

Apple Corporation: Strategy Analysis

Executive summary

Apple Corporation continues to be the worlds most admired company because of its huge financial base, ability to attract and retain customers, ability to innovate and to produce technologically superior products. The company’s strategy as found in this report is built around creativity and innovation. Its capabilities in terms of resources and technology have made the company to produce technologically advanced products. Despite the huge influence of the external factors such as regulations, the economy and changes in technology, Apple is still strong and able to leverage its capabilities to achieve success. Apple is thus ...view middle of the document...

Third, it will analyze both the internal and external business environment in order to establish market conditions as well as the capabilities of the firm. Fourth, it will look at challenges that could affect the company in the future and strategies that could be used to counter these challenges. It will then provide a succinct conclusion of the discussed ideas before presenting recommendations on the way forward for the company building on the information identified and business and management concepts.

Company background

Apple Corporation as a company was incorporated in 1977. It is a technology based company that specializes in the designing and manufacturing of electronic devices which include telecommunication devices including mobile phones (Apple, 2012). It also deals in personal computers, media devices and portable digital music players. The company has also diversified its activities and deals in software applications, computer peripherals and accessories, a full range of networking solutions for businesses as well as third party digital content. The company has become a household name producing popular brands such as the iPhone, iPod, iPad, Mac, the iOS operating system, iCloud among others (Apple, 2012).

Apple’s products are sold all over the world through the company’s retail stores including its online retail store and the company’s direct sales force. The company also engages with other third party retailers including mobile network carriers, wholesalers among others. Its operations are based on five segments, as it has segmented its markets along five geographical boundaries operating in North and South America, Europe, and Japan, some parts of Asia and through retailers across the world (Apple, 2012).

Apple Corporation has a market capitalization of 497.96 billion US dollars (Reuters, 2012). The company posted revenues of USD156.5 Billion in the year ending November 2012 compared to 108.2 in 2011 and thus the company recorded a 43% increase in revenues. The company has been successful in both local and international operations owing to the strong brand name that the company has built over the years and due to the nature of its products that are associated with quality and innovativeness (Reuters, 2012).

Apple’s revenues have continuously increased over the years. An upward trend is witnessed in its revenues from USD. 32.4 million in 2008 and 156.5 in 2012. Its gross profit has also been on the rise with the company posting a positive trend of USD.11.1 million in 2008 and 68.7 in 2012. The company’s profitability has continued to increase over the years. The company’s return on equity has also continued to grow positively from 27.19 in 2008 to 42.84 in 2012 showing increased profitability for the company. The company’s quick ratio stands at 1.2 below the industry’s average of 1.4 while its current ratio stands at 1.50 below the industry’s average of 1.60. Its total debt to equity ratio stands at 0.00...

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