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CASE ISSUESCore Competency ( CI # 1 ) : Apple design. develop and market legion merchandise and service lines. They sell their merchandises to instruction. consumer originative professional. concern and authorities clients. While apple seems to expose legion merchandises and behavior concern on different sections.

it is legitimate to inquire what the company is truly good at? Too much diverseness is precisely what crushed Apple during the John Scully yearss.Cannibalization ( CI # 2 ) : Through January 2005. Apple has opened 102 retail shops. Although these launches are potentially good. Apple shops are aching the resellers’ concern and non all of them will last. Sing that the company’s resellers still account for more than 50 % of its domestic gross revenues.

the company is confronting the hazard of cannibalization and might deeply suffer.High Cash ( CI # 3 ) : Why is Apple keeping so much hard currency? Having excessively much hard currency in modesty might either intend that the company does non cognize yet how to apportion it or that they may hold some hazard concerns about future possible investing.Sequence ( CI # 4 ) : Apple is clearly one of the smattering of companies where the lucks are seen to be elaborately tied to the individual in charge. The star quality and the airy endowments associated with Steve Jobs are surely contributed to the success of the company. So the intelligence of Jobs’ malignant neoplastic disease surgery might take to a sequence job and compromise the company’s hereafter.

I. CURRENT SITUATIONA. Current PerformanceApple achieved a solid public presentation for the first one-fourth of 2005 compared to the same one-fourth 2004 with strong net gross revenues in the Americas section ( +77 % ) in Europe ( +63 % ) and in Japan ( +18 % ) . The Americas section represents about 47 % of the company’s entire net gross revenues. The addition in net gross revenues in the Americas. Europe and Japan was chiefly driven by increased demand of the iPod and the consumer-oriented iMAC.

Demand for the iBook merchandises were particularly high for the Americas. while peripherals and other hardware were more popular in Europe.The retail segment’s cyberspace gross revenues grew to $ 561 million as compared to $ 273 million in the same period in 2004. this represents a singular 105 % addition.B.

SRATEGIC POSTUREMissionApple strives for uninterrupted betterment in our environmental. wellness and safety direction systems and in the environmental quality of our merchandises. procedures and services.Apple’s Guiding PrinciplesO Meet or transcend all applicable environmental. wellness and safety demands.O Where Torahs and ordinances do non supply equal controls.

Apple will follow their ain criterions to protect human wellness and the environment.O Support and advance sound scientific rules and in fiscal matters responsible public policy that enhance environmental quality. wellness and safety.O Advocate the acceptance of prudent environmental. wellness and safety rules and patterns by their contractors. sellers and providers.

O Communicate environmental. wellness and safety policies and plans to Apple employees and stakeholders.O Design. manage and run our installations to maximise safety. advance energy efficiency and protect the environment.

O Strive to make merchandises that are safe in their intended usage. conserve energy and stuffs and prevent pollution throughout the merchandise life rhythm including design. industry. usage and end-of-life direction.O Ensure that all employees are cognizant of their function and duty to carry through and prolong Apple’s environmental.

wellness and safety direction systems and policy.GoalsO Innovation above everything else.O Increase gross revenues in the instruction section.O Produce user friendly.

good visual aspect merchandises to acquire clients “think Different” and “think Digital” .O Developing new digital lifestyle consumer. and professional package applicationO Investing in new merchandises country such as rack-mount waiters. RAID storage system and radio engineerings.

O Provide a high quality gross revenues and after gross revenues support experience.SchemeTrough the design and the development of its ain operating system. hardware and many package application and engineerings. Apple strives to convey to its clients obliging new merchandises and solution with superior ease-of-use. seamless integrating and advanced industrial design.

Apple presently focus on:O Increasing selling and advertisement investing in order to better merchandise and trade name consciousness.O Vertical growing scheme: spread out the retail section by opening more retail shops. ( CI # 2 )O Market chances related to digital music distribution and consumer electronic devices. including iPod.O Implement a cost leading scheme to maintain up with the competition and be more low-cost for the educational section.

O Continue to be the leader in invention for new engineering by implementing a merchandise distinction scheme.Policies“Employee diverseness “ : This policy is a cardinal constituent and contribute to the success of the company.“We regard these differences and menace them as an extra value that we incorporate in the manner we treat other and near our clients. ”Therefore.

Apple apply that each employee is to the full responsible for understanding and following this policy.“Substance policy”O Apple comply with applicable substance statute law worldwide.O proctor and assess new scientific findings on the environmental impact of substances used in Apple merchandises.O educate our supply concatenation spouses and drive inventions within our supply concatenation to happen alternate stuffs that improve environmental public presentation.“Product Take-Back and Recycling Policy”O Manufacturers should supply a agency to ease environmentally friendly recycling of their merchandises at the terminal of electronic products’ utile life.O Consumers should choose a disposal method for end-of-life electronics merchandises that does non adversely impact the environment.

O Governments should develop a legal model and public policies to advance appropriate end-of-life direction. including environmentally friendly disposal and recycling.O Materials generated from the recycling of our merchandises should be used as feedstock for new merchandises whenever possible.II. CORPORATE GOVERNANCEA.

BOARD OF DIRECTORSThe Board consists of 6 members. of which 5 are external managers:Board Member-Occupation Audit and Finance commission Nominating Committee Compensation CommitteeWilliam cubic decimeter V. CampbellChairman Intuit. Inc C CccMillard S. DexlerChairman and CEOJ. Crew C CAlbert Gore.

Jr. Former Vice President of the US C CSteve JobsCEO and Co-founderApple ComputerChairman and CEOPixarArthur D. LevinsonChairman and CEOGenentech. Inc C CccJerome B.

YorkCEOHarwinton Capital Corporation Ccccc=Chairperson C=Member*Audit and commissions members are used to guarantee feedback and proctor execution and conformity.Steve JobsCo-founder of Apple in 1976. he has played an of import function in the development of the personal computing machine. He besides co-founded NeXT Software. inc.

and served as CEO until 1997 when NeXT was acquired by Apple. Director since 1997 and presently CEO of Apple and Pixar Animation Studios. Jobs is viewed as a cardinal character for the company. However his strong voice and personality within the company could give him the power to rock the board. ( internal ) ( Advantage/Conflict? ) CI # 4William V. CampbellDirector of Apple since 1997.

he was besides the former CEO and president of Intuit. Inc. Mr. Campbell besides serves on the board of managers of Opsware. Inc. His experience and cognition in concern.

finance and engineering might be valuable for the company. nevertheless. he is in direct competition with Apple in the sale of package such as Quickbook. ( External ) ( Conflict )Millard S. DexlerDirector of Apple since 1999.

he has been Chairman and Chief Executive Officer of J. Crew Group. Inc. since March 2003.

Previously. Mr. Drexler was Chief Executive Officer of Gap Inc. from 1995 and President from 1987 until September 2002. ( External )Albert Gore.

JrDirector since 2003. he was a former Vice President of the United States of America. He has remained an active leader in engineering. establishing a public/private attempt to wire every schoolroom and library in America to the Internet. Therefore.

Gore plays a cardinal function in the execution of Apple’s merchandises in the educational section. ( External ) ( advantage )Arthur D. LevinsonDirector since 2000. he has been President.

Chief Executive Officer and a manager of Genentech Inc. since July 1995. Mr. Levinson’s experience could profit apple but his involvement may be someplace else.

( External ) ( Advantage/Conflict? )Jerome B. YorkDirector since 1997. he is besides a manager of Tyco International Ltd. and Metro-Goldwyn-Mayer.

Inc. Previously. Mr. York was Chairman and Chief Executive Officer of MicroWarehouse. Inc. .

a reseller of computing machine hardware. package and peripheral merchandises and he besides served as a Senior Vice President and Chief Financial Officer of IBM Corporation. Mr. York’s experience in the computing machine industry might be a large pro for the company.

( External ) ( Advantage )The Board of Apple is composed of a really diverse group of professionals who bring valuable expertness in the countries of engineering. biotechnology. finance. turnaround schemes.

retail concern direction. etc. The backgrounds and current “independent” places of these members provide a wealth of cognition and a assortment of concern positions for Apple. However the external activities of some of the members of the board might besides be a beginning of struggle for the company.B. Top Management & A ; Management Style1 ) Fred D.

Anderson-Executive Vice President and CFO2 ) Timothy D. Cook-Executive Vice President. Worldwide Gross saless and Operationss3 ) Nancy R. Heinen-Senior Vice President. General Counsel and Secretary4 ) Ronald B. Johnson.

Senior Vice President. Retail5 ) Peter Oppenheimer. Senior Vice President of Finance and Corporate Controller6 ) Jonathan Rubinstein. Senior Vice President. Hardware Engineering7 ) Philip W. Schiller.

Senior Vice President. Worldwide Product Marketing8 ) Vertrand Serlet. Ph. D.

-Senior Vice President. Software Engineering9 ) Sina Tamaddon. Senior Vice President. Applications10 ) Avadis Tevanian.

Jr. . Ph. D. -Senior Vice President.

Chief Sofware Technology OfficerC. Management StyleDespite the fact that the company claims to hold a partnership direction manner. I personally believe that Steve Jobs is taking an entrepreneurial manner and extremely act upon the company. ( CI # 4 )III.

EXTERNAL ENVIRONMENT SCANA. SOCIETAL ENVIRONMENT1 ) Political-Legal ForcesO Different states have different statute laws and these in some ways restrict the companies or give chances to the company.O NAFTA. European Union and other regional trade unfastened doors to market in Europe. Asia. Latin America that offer tremendous potency.

O Political uncertainnesss caused by terrorist act activities are straight impacting the overall concern of the company.O The company relies on entree to patent and rational belongings obtained from 3rd parties. The company might unwittingly meet infringe issues with bing patents of others.O Beatles case against the company may negatively impact the company’s repute.O The company has to follow with the environment ordinances such as environment safe disposal or recycling.

2 ) Socio-Cultural ForcesO The computing machine and internet use is turning world-wide and is a good beginning of chances for the computing machine industry.O Customers had become more experient and computing machine literate.O Education has become a aboriginal issue for the new coevals. which is a cardinal factor for the company’s concern.3 ) EconomicO In the past twelvemonth.

the industry has been affected by the slow economic and that resulted in low consumer disbursement. However the current economic system shows some mark of betterment. consumer disbursement and investing might increase every bit good.O Due to weak economic conditions.

the U. S. educational is meeting big budget shortages in many provinces. This factor has a negative impact over Apple’s gross revenues in the educational section.O Gross saless of merchandises that include constituents obtained from foreign providers can be adversely affected by currency exchange rate fluctuations and by international trade ordinances ( duties and antidumping punishments ) .4 ) TechnologyO Technology is germinating at a rapid gait today.

and people appreciate more & A ; more progresss in their systems and are exchanging over to new information contraptions.O Internet handiness and use is turning and leads to good chances for the industry.O The traditional desktop might go outdated by the entryway of new radical merchandises.O Increasing demand for new engineering in schools and professionals.B.

TASK ENVIRONMENTMenace of New Entrants:O Medium to High – In the Personal computer market any house that discovers a new engineering that is efficient in footings of monetary value & A ; public presentation is an immediate menace to the industry. However. Established criterions. start-up costs and established trade names names ( Intel. Windows ) are hard to get the better of for a new entrant.Menace of replacement merchandises:O High – The new signifiers of Information contraption like Digital TV / HDTVDigital set- top box & A ; Internet screen phones are deriving increasing popularity this might halter the growing of the Personal computer industry as a whole.


Dickering power of providers:O High – Since the industry is extremely dependent on constituent providers. a powerful provider could exercise force per unit area on the market. by providing constituents at a higher monetary value to increase his net incomes. Since Apple is working merely with few selected providers.

the company is running at a higher hazard than the norm.Dickering power of purchasers:O Low – Due to high figure of other providers in the industry the client has the options to take the cheapest and the best.Rivalry among competition:O High – Competition among the giants is ferocious. everyone taking for a larger market portion. intensive monetary value cuts & A ; alterations.IV.

INTERNAL ENVIRONMENT SCANA. Corporate StructureApple is organized along functional lines.Apple is structured chiefly on a geographic footing. The company’s describing operating section are comprised of:1. The Americas2.

Europe. Middle East and Africa3. Japan4. Other: Asia-Pacific ( Australia.

Asia. and the subordinate FileMaker. Inc. )B. Corporate CultureO Commitment to invention and merchandise qualityO Dedication to hard work and instructionO Commitment to diverseness and to authorising employeesO Commitment to safety and preservation of the environment/energySteve Jobs has a immense impact in the company’s civilization. Since Job’s return in 1997.

the company has reinvented itself with an array of different colourss and manners of computing machines. The debut of the Ipod and Itunes mostly place the company as an advanced leader.C. CORPORATE RESOURCES1.

) Selling Mixa. ) MerchandiseApple is committed to sell original. good looking merchandises that have an easy-to-use interface. The company offers a scope of personal computer science merchandises.

related devices and peripherals. and assorted 3rd party hardware-products. In add-on. the company offers package merchandises ( Mac OS X ) . waiter package and related solution ; professional application package ; and consumer.

instruction and concern oriented application package.Apple has been really advanced by happening new uses for its Macintosh computing machine. such as desktop publication and strong graphics/animation capablenesss. The Macintosh’s functionality for pull offing multimedia files from cameras.

DV recording equipment and MP3 devices has been really popular and successful.The new debut of Apple’s iPod and the iTune has revolutionise the digital music industry.b. ) Topographic pointApple’s runing section are comprised of:O U. S.O South AmericaO EuropeO JapanO Australia.

Recently Apple chose to implement a perpendicular growing scheme and began spread outing their ain retail shops. ( CI # 2 ) The company besides sells its merchandise via third-parties traders. or via cyberspace through their ain web site or through the iTune on-line music shops.c. ) PromotionIn 2003.

Apple formed a strategic confederation with PepsiCo. The Pepsi iTune Music publicity calls for people to utilize the winning codification found under the Pepsi’s bottle caps merchandises to deliver vocals from Apple’s iTunes Music Store. This publicity has already been successful for both companies and increased the consciousness of the iTune presence in the market.In 2003. Apple besides announced a selling partnerships With America Online that are aimed at driving iTunes use profoundly into the mainstream.

Apple and America Online have agreed to set iTunes “buy this song” buttons next to every vocal that’s listed in AOL’s music service. which its 25 million endorsers can entree. Snaping the button will automatically establish the iTunes music nickelodeon and get down downloading the vocal ; charge will be handled through the customer’s bing agreement with AOL.Apple has a joint venture with Hewlett Packard.

Apple has produced an iPod for Personal computer users and the success of this merchandise was a good manner for the company to capture non-MAC users.The company’ besides drew on indorsements from music stars. U2 vocalist Bono. knap artist Dr. Dre and Rolling Stones vocalist Mick Jagger each gave a unrecorded indorsement of the iChat videoconferencing package.

Singer Sarah McLachlan besides appeared unrecorded to sing several vocals and to speak about how she used the iPod.In 2005. Apple Computer has initiated a partnership with Wal-Mart that will shortly see the iPod shuffling featured at Wal-Mart price reduction locations around the state.d. ) Monetary valueApple monetary value is know to be above norm in the industry. The company is utilizing a distinction scheme and concentrate more on invention.

and quality. This scheme is warranting their premium monetary values. Recently. nevertheless. their new engineering and their high hard currency flow allowed them to take down their monetary value and to offer more price reduction to certain markets such as the instruction market. ( CI # 3 ) This new pricing scheme may assist Apple to better vie with the non-Mac user market but might do some issue with the trade name image/recognition.

2. ) FinanceThe fiscal consequences for the financial 2004 4th one-fourth ended September 25. 2004.For the twelvemonth 2004. the Company reported net income of $ 276 million on gross of $ 8. 28 billion compared to net income of $ 69 million on gross of $ 6.

21 billion in 2003. Their net income has increased 400 % !Gross saless to the instruction market grew 11 per centum. conveying its highest quarterly sum for that market in seven old ages.Apple has a strong balance sheet with a batch of hard currency ( CI # 3 ) . their stock lists have about double compared to the twelvemonth 2003.

Apple short-run debt and long-run debt have been wholly paid. which is a really good advantage for the company.Apple’s activity ratios are really good and improved a batch compared to twelvemonth 2003. However their ROE and ROI ratios are still low compared to the industry.Income Statement Sep 04 Sep 03 Sep 02Gross 8.

279. 0 6. 207. 0 5. 742. 0Cost of Goods Sold 5.

870. 0 4. 386. 0 4. 021.

0Gross Net income 2. 409. 0 1. 821.

0 1. 721. 0Gross Profit Margin 29. 1 % 29.

3 % 30. 0 %Net Income After Taxes 276. 0 69. 0 65.

0Balance Sheet Sep 04 Sep 03 Sep 02Cash 2. 969. 0 3. 396.

0 2. 252. 0Net Receivables 774. 0 766. 0 565.

0Inventories 101. 0 56. 0 45. 0Entire Current Assets 7. 055. 0 5.

887. 0 5. 388. 0Entire Assetss 8. 050.

0 6. 815. 0 6. 298. 0Histories Collectible 1. 451.

0 1. 154. 0 911. 0Short-run Debt 0. 0 304. 0 0.

0Other Current Liabilities 1. 229. 0 899. 0 747. 0Entire Current Liabilities 2.

680. 0 2. 357. 0 1.

658. 0Long-run Debt 0. 0 0. 0 316. 0Entire Liabilities 2. 974.

0 2. 592. 0 2. 203. 0Entire Equity 5. 076.

0 4. 223. 0 4. 095. 0Ratios 2004 2003 IndustryLiquidity RatiosCurrent Ratio 2. 58 2.

89 1. 33Quick Ratio 2. 3 1. 44 1.

1Profitability RatiosGross Profit Margin 29. 47 % 27. 52 % 20. 43 %Net Net income Margin 5. 20 % 1. 11 % 4.

53 %Tax return on Equity ( ROE ) 8. 8 % 1. 63 % 20. 3 %Tax return on Investment ( ROI ) 8. 8 % 1. 01 % 19.

1 %Activity RatiosInventory Turnover 56. 2 110. 84 81. 4Asset Turnover 1. 2 0. 9108 1.

8Leverage Ratio 1. 62 2. 473. ) Research and DevelopmentApple consider that R & A ; D are critical for the activity of the company.

hence. they are willing to increase investing in R & A ; D to maintain a sustainable competitory advantage in the industry. Harmonizing to the company’s Annual Report in 2004:“In order to stay competitory. the Company believes that increased investing in research and development ( R & A ; D ) is necessary in order to keep and widen its place in the markets where it competes. The Company’s R & A ; D disbursement is focused on presenting timely updates and sweetenings to its bing line of personal computing machines. shows.

runing systems. package applications and portable music participants ; developing new digital lifestyle consumer and professional package applications ; and puting in new merchandise countries such as rack-mount waiters. RAID storage systems. and wireless engineerings. ”New merchandises are a necessity in this industry and seems to be a precedence for Apple. New merchandises are non ever a success.

though. This might explicate why Apple seems to be so hesitating in puting its high hard currency flow into new undertakings. the company might be afraid by the possible failure of the result. ( CI # 3 )4. ) Operation and LogisticssApple to a great extent rely on third-parties in the fabrication and logistics sector. Therefore.

the company’s overall public presentation is greatly dependent on the public presentation of its distributers. In order to hold more control over the quality of the purchasing experience. Apple has done continual attempt to go vertically incorporate during these two passed old ages.Apple work merely with providers that meet the standards from their policy ( affect committedness to environment. safety and diversity.

)At each period the company performs a elaborate reappraisal on demand prognosiss. stock list. merchandise lifecycle position.5. ) Human Resources Management ( HRM )Apple has over 13.

000 employees universe broad.Apple believe that employee’s diverseness is a cardinal constituent for the company success. The company expects that all employee will esteem the background or cultural differences of their equals.Apple offer great benefits to its employee such has competitory wage.

and compensation. insurance coverage. fillips. significant merchandise price reduction. stock purchase and saving/investment program.

The company offers all-level of place such as internship. parttime and entry-level for college pupil.6. ) Information SystemsApple has encountered a significant success by presenting a new digital music device called iPod that can hive away 1. 000 vocals and copy a Cadmium in 10 seconds.

The continual heavy investing in R & A ; D allowed the company to be on the border of new engineering.Online shop distribution channel has been really powerful for the company.V. SWOT/TOWS ANALYSISA. SWOT ANALYSISStrengths Failings1.

Ease of usage 2. Established in the personal computing machine market3. High Corporate repute 4. Control over the merchandise ( manufacture both the computing machines themselves and besides the operating systems which they run ) 5. Leader in invention and merchandise differentiation6.

Employee diverseness 7. Strategic Alliance ( HP ) 8. Joint venture with Pepsi9. Strong Top management10. Loyal client base11. Creative manner 1.

The easiness of usage has led to some image issues. with some concern people sing the Macintosh as a plaything. 2. High inventory3. Distribution problems4. high prices5.

Not IBM compatible. though great paces have been made in connectivity the Macintosh is non transparently compatible. 6. Worsening portion in educational market7.

Too many merchandise linesOpportunities Menaces1. Internet2. Turning industry3. Making new package markets and selling the hardware into these markets. 4.

Demand for innovation5. Employee benefit programs6. Turning educational market ( In both higher instruction and schooling. the Macintosh easiness of usage and low care costs are attractive. ) 7. Music downloads from Itune 1. Very intense competition among the industry2. Price competition3. loss of market share4. Potential litigations5. Budget shortages in education6. Technological and monetary values discontinuity7. Potential addition in supply’s costsB. TOWS ANALYSISSO1. Concentrating on invention and merchandise distinction will lend to the clients satisfaction ( S5. O3. O4 ) 2. The diverseness of the employees and the employee benefit plans contribute to the high corporate repute ( S3. S6. O5 ) 3. Joint venture with Pepsi and strategic confederation with HP respond to the demand for music download. ( S7. S8. O7 ) WO1. The turning educational market should increase Apple’s market portion in this section ( W6. O6 ) 2. The turning industry should let the company to diminish monetary values ( W4. O2 )ST1. The high corporate repute might endure from the possible judicial proceedings. ( S3. T4 ) 2. Strong direction might get the better of the possible judicial proceedings. ( S9. T4 ) 3. Focus on invention and merchandise originative manner might countervail the low monetary values of rivals. ( S11. T1. T2 ) 4. Invention will depend on the technological -prices conditions and alterations. ( S5. T6 ) WT1. The image issues refering the easiness of usage of the machine might lend to the loss of portion. ( W1. T3 ) 2. The discontinuity in engineering and monetary values might make some prediction jobs. which could ensue in surplus or deficit of stock list. ( W2. W3. T6 ) 3. Competition might take advantage of Apple’s high monetary value. ( W4. T1. T2 ) 4. Apple’s high monetary value might take down the sum of educational contracts ( W4. T5 ) 5. Not being IBM compatible might take to loss in market portion ( W5. T3 ) 6. The wide merchandise line might be endangered by the engineering and monetary values discontinuity. ( W7. T6 )VI. STRATEGIC ALTERNATIVES AND RECOMMENDED STRATEGYA. STRATEGIC ALTERNATIVES1. ) TurnaroundThe company could halt the enlargement of their ain retail section in order to keep a healthy relationship with its third-party distributer and avoid case. This scheme would besides cut down the hazards and costs tied to the shops investing. Apple could utilize its high hard currency to implement a merchandise development scheme within the market section they are presently functioning. The company could besides maintain selling its merchandises at a premium monetary value in order to keep the company’s repute as an upscale and advanced trade name.ProfessionalsO Improve relationship with resellers. ( CI # 2 )O Reduce hazardsO The allotment of the high hard currency into a merchandise development scheme might finally increase the gross of the company ( CI # 3 )O The premium monetary value might be profitable and the upscale image trade name of the company is respected.ConO No control over the quality of the purchasing experience procured by the third-party distribution ( CI # 2 )O Potential loss of market portion because of the premium merchandising monetary valueO Broad merchandise lines might take to confusion and excess operating expense costs. ( CI # 1 )2. ) Pause and Continue with CautionIn the Annual Report for 2004. the company saw an addition in gross and profitableness. The debut of iPod or Itune points have mostly contributed to the company’s successful twelvemonth. The retail section growing has increased the trade name consciousness of the company but has led to some struggles with the resellers. This scheme has to be taken with cautiousness because Their lower monetary value scheme is leting the company to pull some non-Mac users.During the mid of this twelvemonth ( 2005 ) . the company could see to chiefly concentrate on: the music section market and the instruction section. Apple could besides implement a sequence program for the eventual going of Steve Jobs. The company’s growing scheme has to be taken with cautiousness and via medias with resellers have to be done.ProfessionalsO Good fiscal consequencesO More control over the quality of the purchasing experience ( CI # 2 )O Better trade name consciousnessO Less confusion among nucleus competence. ( CI # 1 )O Sufficient hard currency flow to back up the discounted monetary values. ( CI # 3 )ConO Cannibalization hazard is still present ( CI # 2 )O The low monetary values might discredit Apple’s upscale trade name image.3. ) Vertical GrowthThe company could make up one’s mind to make a forward integrating. by spread outing its ain retail shop. Apple could utilize its high hard currency to finance this investing. The shops are a critical manner to leverage Apple’s trade name and show window newfangled digital wares to flush consumers.ProfessionalsO Total control over the quality of the purchasing experience ( CI # 2 )O High hard currency can back up the investing for the retail section ( CI # 3 )O Better trade name consciousnessConO Dissatisfaction of the resellers ( CI # 2 )O Potential loss of gross due to cannibalization ( CI # 2 )O The high hard currency investing is hazardous. and might hold been allocated in a more safety manner. ( CI # 3 )B. RECOMMENDED STRATEGYPause and ContinueThe last financial twelvemonth has seen betterment for Apple. Net incomes have increased and the focal point has been on invention. particularly in the music section market.Using the high hard currency to implement a monetary value scheme appears to be a good thought to vie with the non-Mac users. ( CI # 3 ) The trade name image might somewhat endure from this scheme. therefore marketing inducement should be increased in order to prolong Apple’s repute for high quality and advanced merchandises.The retail section growing should be implemented with a batch of cautiousness. Apple needs to ease the hurting of the resellers by coming up with plans to promote these longtime spouses to assist it accomplish ends it can’t achieve on its ain. ( CI # 2 )Apple should besides chiefly concentrate on the music section market and the educational section market in which they have good chances. This focal point would let Apple to be more competitory and profitable. ( CI # 1 )Least but non Last. the company should fix a sequence program in response to the eventual going of Steve Jobs. ( CI # 4 )VII. ExecutionA. WHO? The top direction should contract their focal point to two market section.B. WHAT? Apple’s nucleus competence should concentrate on the music section market and the educational section market in which they have good chances. ( CI # 1 )C. HOW? The company has to put more into these 2 sections and cut some merchandise lines that are non really profitable to the company.D. WHO? As Steve Jobs initiated. the company should maintain concentrating on a monetary value schemeE. WHAT? By take downing the monetary values. the company will be able to be more competitory and increase market portion.F. HOW? The company can utilize its high hard currency to back up discounted monetary values. ( CI # 3 )G. WHO? The top direction should make up one’s mind to spread out the retail shop.H. WHAT? Better the quality of the purchasing experience by holding control over the sales representative and collaborate with the resellers. ( CI # 2 )I. HOW? The company can utilize its high hard currency to put in the retail shop enlargement. The company should besides tightly work with the resellers by back uping them through plans and fillips. ( CI # 2 ) ( CI # 3 )J. When? During mid 2005.K. HOW MUCH? The Company’s current strong fiscal status and low debt-to-equity ratio will supply the agencies to carry through these execution enterprises in the short-run. In the long-run these steps will be good worth the cost in increased gross and market portion.L. WHO? The board of managers and the top direction should fix a sequence program. ( CI # 4 )M. WHAT? The company has to cover with Steve Jobs eventual going.N. HOW? Steve Jobs has to depute some of his power to the top direction and he should besides implement some preparation plans. Tim Cook might be a good potency replacement. ( CI # 4 )P. WHEN? Right now.VIII. MAINTENANCE AND CONTROLA. The company’s strong fiscal place should let the execution of the schemes stated supra. However the investing related to the retail section growing is really dearly-won and might be hazardous. Therefore. the company should:O Increase bit by bit the gap of retail shops.O Assess public presentation by holding Finance and Marketing reexamining “the Numberss “monthly” .O Spot and instantly address any negative tendenciesThe top direction should sporadically see shops and gather feedback from line employees. They should besides garner feedback from resellers to turn to enlargement issue.B. The company’s focal point on the music section market and the instruction section market has to be tightly monitored.O Top direction should measure on a hebdomadal footing overall public presentation. ( Revenue. Net income. ROI )O Feedback signifiers should besides be given to clients to keep good dealingss and to descry market tendencies early.Plants Cited10-Q for Quarterly Time period Ended December 25. 2004hypertext transfer protocol: //www. apple. com/investor/Apple Governancehypertext transfer protocol: //www. apple. com/investor/Apple Financial Analysishypertext transfer protocol: //www. Hoovers. com/Diverse Articles on Applehypertext transfer protocol: //www. businessweek. com

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