Submitted by:
Navneet Daga (08015)
Shishir Saralesh (08022)
Soumik Mukherjee (08024)
Sourabh Kumar Saha (08025)
Sudipta Das (08027)
Apple
Think Differently
Innovation part of corporate structure
Introspective, self-contained operating style
Redefines each market it enters by creating brilliant gadgets
Put the competition to shame
Operates through five operating segments: Americas, Europe,
Japan, retail and others
Number of acquisitions during 2002
Acquired Prismo Graphics, Silicon Grail
Assets of Zayante, music software manufacturer Emagic, assets
of Nothing Real
Created Digital image in market
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Apple and Music World
i-Tunes “2003”.Music Downloading software
Signed licensing agreements Beggars Group, Sanctuary
Records Group and V2
Added tens of thousands of additional independent tracks
from leading artists
Introduced its fourth generation iPod portable digital
music player in 2003
Collaborated with Acura, Audi, Honda and Volkswagen
to deliver iPod with their car stereos
Introduced mobile phone with iTunes in collaboration
with Motorola and Cingular Wireless
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Organizational change
Eight Steps for Organizational Change
establishing a sense of urgency
forming a powerful coalition
creating a vision
communicating the vision
empowering others to act on the vision
planning for and creating short term wins
consolidating improvements
still more change
institutionalizing new approaches
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Crucial Success Factors
Operating system is developed in house
Very large degree of control over its product in
features
Apple fosters a research intensive office environment
Releasing products with the current trends and styles
Ignoring Market research & Competitor Analysis
Intensive investment in R & D. Ignoring Fads
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Brand building
Brand identity= Name + Logo + Slogan
Name: Apple is a familiar word /friendly name
Logo: Bite taken Apple: simple and memorable
Slogan: “thinking different” is short and says a lot
"heartfelt connection with its customers.
Building trust to establishing a community around a
product
"Apple's design is people-driven“
Promise a great customer experience with their
products.
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Apple and Steve Jobs
In 1996, Apple bought NeXT, and with it came Steve
Jobs
In 2000, Jobs became the full CEO of Apple
Success of the iMac
Jobs continues to innovate the computer industry
Heading projects like the iPod, iTunes
Heading the computer industry
Apple entered a new phase of growth and profitability
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Without Steve Jobs
In May of 1985, Sculley announced another reorganization
New general manager of the Mac intosh Division to
replace Jobs
Jobs operating role in the company as chairman was
taken away.
On September 17, 1985, he resigned from Apple
Lost about $1 billion on $7 billion in revenue
Did very poorly in the early and mid 90’s,
Brought on by poor leadership and stagnating computer design
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SWOT Analysis
Strengths
Weaknesses
•Global presence
•Low returns
•Brand image
•Dependency for key
•Synergistic portfolio
components
•Strong media content
Opportunities Threats
•Wireless products •Strong competition
•New digital platform •Slow Eurozone economy
•MP3 player market Lawsuits
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Key Financial Ratios
BALANCE SHEET RATIOS 2008-09
Financial
Company Industry S&P 500
Condition
Debt/Equity
0.00 0.09 1.24
Ratio
Current Ratio 2.5 2.3 1.3
Quick Ratio 2.5 2.3 1.1
Interest
NA 1.6 24.3
Coverage
Leverage Ratio 1.5 2.0 3.9
Book
39.47 34.81 18.15
Value/Share
RETERN ON INVESTMENT
Apple PEER COMPANIES STOCK MARKET
Investment Returns % Company Industry S&P 500
Return On Equity 31.9 31.4 18.7
Return On Assets 19.4 17.3 5.9
Return On Capital 27.2 24.5 8.1
Return On Equity (5-Year 29.2 32.4 14.1
Avg.)
Return On Assets (5-Year 17.9 16.8 6.4
Avg.)
Return On Capital (5-Year 26.3 26.3 8.6
Avg.)
10 YEARS COMPARISON OF RATIOS
Net Profit
Price/ Price/
Avg P/E Margin
Sales Book
(%)
09/09 13.30 3.86 5.19 19.2
09/08 24.00 3.09 5.11 16.3
09/07 26.50 5.55 9.21 14.2
09/06 29.20 3.50 6.59 10.3
09/05 24.10 3.27 5.98 9.5
09/04 38.80 1.74 2.88 3.2
09/03 89.80 1.21 1.80 1.1
09/02 112.80 0.93 1.29 1.1
09/01 -185.80 NA 1.39 -0.7
09/00 23.70 1.16 2.10 9.8
MANAGERIAL RATIOS
APPLE PEER STOCK MARKET
COMPETITORS
Management Company Industry S&P 500
Efficiency
Income/Employee 272,828 236,052 35,703
Revenue/Employee 1 Mil 1 Mil 321,055
Receivable Turnover 17.7 16.7 13.5
Inventory Turnover 56.8 55.2 7.0
Asset Turnover 1.0 1.1 0.7
Key Lessons
Apple has high R&D costs
Apple is far less cost effective in a very saturated
market
Customers get scared of an operating system that
looks different then windows
Assume it doesn’t work the same.
Hinders the ability of Apple to steal away existing PC
users to grow its market share.
Apple has problems with some customers due to the
high prices of many of their products
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Thank You
Thankyou
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