Apple Company Business Plan: Executive Summary
Apple Inc is one of the leading electronic firms in the global market. This American firm has enjoyed massive success over the recent past due to a series of unique strategies employed by its top managers. According to Friedlander (2006), Apple Inc has voted the most valuable brand in the world, with an estimated value of $118.9 billion.
In the United States, the firm’s share price has remained relatively stable despite the recent economic challenges that were experienced in the United States. Its marketing strategies, especially the emphasis on social media marketing, have enabled the firm to gain massive loyalty in the international market. Despite this impressive performance, the future of this firm remains uncertain.
The electronic market is becoming increasingly competitive. This competition has been worsened by a number of Chinese firms that mimic the products of the top brands and sell them in the international market. Consumers have also become very demanding. They have a variety of choices whenever they want to purchase any product (Metcalf & Manktelow, 2000). Apple must come up with a strategic business plan that will enable it to overcome these challenges. It must remain innovative in its product development and delivery methods.
Business Plan of Apple: Rationale
The firm was chosen because of its strategic importance to the investors in the United States. According to Yoffie (2012), Apple Inc is one of the trusted firms among the United States’ investors. Firms such as Lehman Brothers and Enron brought disappointments to many investors. They lost their investments because of irresponsible business management plans. Currently, the management of Apple Inc is seen to be effective and very transparent when dealing with its investors (Rajkumar, 2009). It is for these reasons that the top management needs to come up with effective plans that will enable it to remain at the top in this industry.
Description of Apple Inc.’s Business Plan
Apple Inc was founded in April 1976 by Steve Jobs and Steve Wozniak as developer and marketer of personal computers. The two computer experts later invited Ronald Wayne into their business to guide them in marketing their products. Its initial market operations were a huge success because they came up with a product that was unique. It was during this time that personal computers were first introduced into the American market. Before then, IBM only manufactured mainframe computers for large organizations such as the American military.
In January 1977, the company was incorporated. The official name at that time was Apple Computer, Inc. Since then, this firm has expanded to become one of the world’s leading consumer electronics firms in the global market. The firm currently has its headquarters in Cupertino in California. The firm has expanded its products line beyond personal computers and Smartphone. Currently, the firm is also producing smartwatches, security management gadgets used in areas such as airports, iCloud services, and a series of computer and Smartphone software. The expansion of the product line was meant to increase revenue at the firm.
The business of manufacturing and selling computer products in the modern market comes with a number of challenges. The main challenge is stiff competition from the market rivals. There is also another problem of piracy that harms the massive investment the firm makes in research. Despite these challenges, this firm must come up with a business plan that can enable it to achieve success in the market.
According to Bach (2007), Apple Inc has been relying on speciality stores to sell its products. Opening up such speciality shops in developing countries, especially in Africa, has been a major challenge. That is why market rivals such as Samsung have outsmarted it in the developing markets. In this business plan, a new strategy will need to be employed by this firm to enable it to expand its operations to the developing markets. It is proposed that this firm should embrace a new marketing strategy that allows it to partner with major supermarkets in the emerging markets to carry its products. The firm can retain a few speciality shops where its clients can visit in case they have specific issues with the products they bought or are planning to buy. However, the bulk of their products should be made available at the supermarkets.
The firm can have one or two of its employees working in the sections where the products are carried within these stores. These employees must be experts who can address any technical questions that consumers may have when they are planning to purchase the products (Gillam, 2012). This strategy will not only increase its market coverage but also reduce its operational expenses. The number of employees at this firm will reduce because the product will be sold by a third party. The cost of renting speciality shops will also reduce. The ultimate outcome of this new strategy will be increased revenue at this firm.
Product and Services
Apple Inc operates in the consumer electronics market. The firm is one of the leading manufacturers of mobile phones and personal computers. It is known for its iconic products such as Mac book, iPhone, iPad, tablets, and iPod. It has expanded its line of products, and it is currently offering cloud solution products such as iCloud, iTunes Store, Mac App Store, and iOS store (Lashinsky, 2012). The firm also offers an array of different software that can be used in personal computers and Smartphones such as OS X, iWork, and iLife.
The main market for this firm is in the United States of America and parts of North America. However, the firm has made successful entries into some of the emerging markets such as China, India, and Brazil (Sutherland, 2012). The brand is also trusted in the European markets for its value. As mentioned in the section above, the firm has expanded its product offering in the market. It currently offers security management tools used at airports, supermarkets, hospitals, and many other organizations that face the threat of terrorism.
Market Analysis
The current market where Apple Inc operates is very competitive. SWOT analysis may be necessary for market analysis. The strength of Apple Inc has been expressed in a number of ways. The ability of this firm to diversify its electronic products to go beyond computers has helped it increase its revenues in the market. To maintain the quality of its different electronic products, this firm has come up with a quality assurance unit in all its subsidiaries in order to ensure that it delivers quality products to the customers. The ability to deliver quality products to the customer has made it develop a special niche in the market, making its brand popular across the world.
The iPhone and iCloud are some of its recent products that demonstrate its capacity to deliver special satisfaction to its customers by bringing products that are a little beyond the expectations of the market. Despite the above strengths, this firm has some weaknesses that have impeded its growth to a given degree. One of the main concerns that this firm has not addressed properly is the issue of environmental management (Reilly, 2004). The components of the products of this firm are known to be very dangerous to the environment. Old phones, laptops, among other products, pose a serious challenge to the environment.
There are various opportunities that exist for Apple Inc in its operations in the global market. One of the opportunities that this firm has had is an expansive and unexploited market in third world countries. The stable economic growth in the major economies means that there is increased opportunity for this firm to expand its sales in such countries as the American and European markets. This growth of the economy means that the consumers will always have enough to spend on luxury goods such as iPhones and iPads. The Samsung Galaxy Note 10.1 and Apple iPad 3 have been competing in the market for supremacy.
There are threats that exist in this industry that are worth noting (Phillips, 2012). Technology is probably the main threat that this firm faces in this industry. It is a nightmare trying to figure out what some of the competitors can do with this same technology. Another threat that this firm face is the stiff competition posed by the rival firms.
Apple’s Revenue and Sales
According to O’Grady (2009), Apple Inc has experienced impressive sales within the last five years due to effective production and marketing strategies that the top managers have maintained. By the end of the third quarter of 2015, the firm announced a revenue of USD 233.715 billion, which was almost 12% higher than that of the previous year. Its operating income rose to USD 71.23 billion while its net income for the same period was USD 53.394 billion. The major increase in revenue at this firm is directly attributed to its impressive sales not only in the United States and European markets but also in the emerging markets in Asia and parts of Africa.
Financials
A critical analysis of the financials of Apple Inc can help in determining its performance in the market. In this section, the analysis will focus on the firm’s income statement and balance sheet for the last three years.
Source (Evans, 2015)
Source (Lüsted, 2015)
As shown in the two financial documents, this firm has experienced impressive success over the past five years. Its income and net assets have been on the rise, a sign that it is growing in strength. Further financial statements can be found at the appendix.
Apple’s Organizational Structure
A critical review shows that Apple Inc is generally successful (Gogerly, 2012). This strategy is meant to improve its sales. By forming a strategic alliance with major supermarkets around the world, the firm will be able to concentrate more on production, leaving the supermarkets to focus on the sales of the product. This business plan will have a simple organizational structure. A new channel of distribution will be introduced. The products will come from the producers to retailers before they reach the consumers. The organization will retain the same structure for the first 5 years of operations. This is a slight change from the current structure of producer to speciality stores before reaching the consumers.
Exit Plan
The exit plan for this new strategy is necessary in case the top management feels that it is not delivering the expected value. The firm will simply inform the strategic partners that the alliance has failed to achieve the expected outcome; hence it shall come to an end.
Appendices
Appendix 1: Apple Inc Income Statement
Source (Evans 2015)
Appendix 2: Apple Inc Balance Sheet
Assets
Liabilities & Shareholders’ Equity
Source (Lüsted 2015)
List of References
Bach, B 2007, Implications of enabling technologies for Apple Inc: Cybermarketing & enabling technologies, GRIN Verlag GmbH, München.
Evans, V 2015, The Financial times essential guide to writing a business plan: How to win backing to start up or grow your business, Prentice Hall, Harlow.
Friedlander, J 2006, Apple numerics manual, Addison-Wesley Publishing Company, London.
Gillam, S 2012, Steve Jobs: Apple icon, ABDO Publishers Company Minneapolic.
Gogerly, L 2012, Cool brands, Lerner Publications, Minneapolis.
Lashinsky, A 2012, Inside Apple: How America’s most admired-and secretive-company really works, Business Plus, New York.
Lüsted, M 2015, Apple: The company and its visionary founder, Steve Jobs, ABDO Pub, Minneapolis.
Metcalf, D & Manktelow, P 2000, Portraits in Black, Good Apple, Inc, Carthage.
O’Grady, J 2009, Apple Inc, Greenwood Press, Westport.
Rajkumar, T 2009, Die Erfolgsfaktoren von Apple Inc, GRIN Verl, München.
Reilly, E 2004, Concise encyclopedia of computer science, Wiley, Chichester.
Sutherland, A. 2012, The story of Apple, Rosen Central, New York.
Phillips, J 2012, Project Management for Small Business: A Streamlined Approach from Planning to Completion, American Management Association, New York.
Yoffie, D 2012, Apple Inc. in 2012, John Wiley & Sons Publishers, Hoboken.