Apple Inc. Strategic Plan

Executive Summary

Apple, Inc. is a well-known company that has continued to expand their products and services in the past few years. This strategic plan is going to take a closer look into Apple, Inc. as a company and how they have become so successful. This plan will also discuss the company's history, the products, and the services they offer, and how the company operates and sets goals. Apple, Inc. has a vision for their company and a mission statement that is of high importance to them. A SWOT analysis is also going to be analyzed in this strategic plan, along with looking at some of Apple’s competitors and their financial outlook for the future.

Company Overview

Apple, Inc. is a company that started out by producing both business and personal computers, along with iPods and eventually started expanding their products. The company was founded in 1976 by Steven Wozniak and Steve Jobs and was originally called Apple Computers, Inc., which is now known as Apple, Inc. (CNN Library, 2018). Apple, Inc. started as a computer company, and as technology and the digital world has continued to evolve, so did the company. Apple began to expand their products by incorporating iTunes music store, the iPod, and eventually incorporating the iPhone. Apple, Inc.’s headquarters is located in Cupertino, CA, but the company has about 506 stores in about 24 different countries, with 272 being in the United States (Apple Stores, 2018). The evolution of the company can be seen in the next section covering the company history.

Company History

Apple, Inc. was originally called Apple Computers, Inc. and was founded by Steve Jobs on April 1, 1976 (Richardson & Terrell 2008). The company was started from Steve Jobs’ garage where Jobs’ and Steve Wozniak began building the Apple I and then the Apple II computer, but it wasn’t until 1980 when the company actually went public due to the high level of sales and money that was coming in (Richardson & Terrell, 2008). Throughout the next few years the Lisa computer was put on the market, which later was discontinued, and then the Macintosh computer was created. Steve Jobs temporarily left the company, returning in 1997 as the CEO, and in 1998 the very popular iMac personal computer was developed and put on the market for customers (CNN Library, 2018). In the following years, the company would introduce the iTunes music store, different types of iPods, new iMac and other computers, and eventually releasing the iPhone in 2007. What’s interesting about the company is that the company also started to market their very own Apple TV, the iPad, and the iCloud which offers online storage for personal or business use (CNN Library, 2015). As the company continued to expand their products, the company’s revenue shot up, making the company one of the most competitive companies out there. In 2014, Apple released the Apple Watch, and in 2015 Apple Music became a popular live radio station for customers to utilize (CNN Library, 2015). While not every product is unique and offers different features to customers, each has been successful in their own way, bringing in quite a bit of revenue for the company.

Products and or services

As described briefly earlier, Apple Computers, Inc. originally only focused on computers, and making them efficient for people to use in their office and at home. Over the years, the company has continued to evolve when it comes to the type of products it offers to customers. For example, in 1998 the Macintosh 128K: the iMac was released which produced a high level of revenue, allowing the company to purchase other companies and continue creating and testing new products (Apple Inc., n.d.). Fast forward up to date the company now offers Mac’s, iPads, iPhones, iPods, watches, televisions, and music stations as mentioned earlier.

Apple’s most successful product is the iPhone which has not only attracted more customers to the company but has also significantly helped the company with the revenue that it has pulled in over the years. The iPhone was a costly product to invest in, roughly $150 million to create, but within the first few months of the iPhone being on the market, the company made about $51.1 billion from 74.4 million iPhones that were sold (Williams-Grut, 2015). This investment was well worth it, and it has been a great source of revenue for the company ever since it was created.

Operations

Operations are one of the most important things for a company to have in place. Operations can be described as a process that focuses on production and tracks the process of the finished product to customers (Unnamed Author, 2015). In order for operations to run smoothly, there are several different individuals and departments within the company that assist with this process. Figure 1 provides an overview of the company’s organizational structure and how the departments work together to make sure the company operates and delivers properly. The Sales Planning and Operations department focuses on the production process from start to finish; for example, they focus on customer service, planning, the execution of the plan, and the operation process behind a sale (Operations, n.d.).

Lariviere (2011) discusses how Apple, Inc. receives discounts on air freight, parts, and manufacturing capacity, and is in charge of most of their supply chain which leads to innovation. Lariviere (2011) also mentions that Apple's operations are extremely vital to the company being able to carry out their strategy and plans. As mentioned earlier, the operation process is what carries out customer interactions, sales, production, deliveries, and much more. Without a proper operation process in place, Apple would not succeed. Organization within operations is important in order to make sure each of the correct steps are made and accomplished. Apple, Inc. operates by planning ahead of their competition, placing bets on production technologies, and working closely with suppliers (Lariviere, 2011).

Vision

Every person typically has a vision for the company they are looking to start. A vision statement can be described as the company’s aspirations and hopes of where they want to go in the future (Unknown Author, 2015). Apple Inc.’s vision statement is quite lengthy; however, it can be summarized as the company continuing to evolve, and wanting to create and provide great products for their customers, and saying no to projects that don’t fall in line with what’s important to the company (Rowland, 2018). It appears as if Apple has held up to their vision due to their ability to produce new products over the last few years and evolving to the digital market.

Mission Statement

A mission statement’s goal is to help capture the company’s identity and explain who they are, what they do, and what they hope to accomplish (Unknown Author, 2015). Apple, Inc.’s mission statement is:

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store and is defining the future of mobile media and computing devices with iPad. (Rowland, 2018)

Apple, Inc.’s mission is to touch multiple different markets and clients. It appears that the company has accomplished this mission in many ways with their products, services, and the number of locations the company operations business. However, there is always room for improvement when it comes to either the products the company offers or the service that is provided to customers.

Corporate Values & Culture

A company’s core values are their beliefs and principles in which they operate their business. Steve Jobs built Apple, Inc. into a company that specifically focuses on supporting people who have a passion, and who are looking for a way to change the world by using it somehow (Think Marketing, 2016). Another core value of the company is to make and sell the best products possible, and to always be looking to develop new products and continue with innovation (Think Marketing, 2016). The company has produced many great products since it started; for example, it has developed the iPad, iPod, and iPhones, all of which have been extremely successful for the company.

Apple, Inc.’s corporate culture can be described as an organizational culture which plays a major role in the company’s success. Apple’s culture emphasizes their innovation and the importance of creativity (Meyer, 2018). For the corporate culture, Apple tends to focus on five main characteristics, such as Moderate combativeness, creativity, secrecy, innovation, and top-notch excellence (Meyer, 2018). As a company, Apple has continued to grow and expand their products and services. Due to the company's ability to be so consistent with their creation of new products, their corporate culture could be said to be very organized and strong (Unnamed Author, 2015).

SWOT Analysis

A SWOT analysis is a tool that helps a company take a closer look at their business by analyzing their strengths, weaknesses, opportunities, and threats (Unknown Author, 2015). A SWOT analysis can be a great process to conduct frequently in order to understand where the company stands, whether it’s in a positive or negative spot. See below for a SWOT analysis conducted for Apple, Inc.

Strengths

According to Khan, Alam, and Alam (2015), one of Apple Inc.’s biggest strengths and successes was expanding their products to more than just computers, which has assisted in bringing in tremendous sales growth. Since the beginning of Apple Inc., the company has continued to grow and expand, and they have created a strong brand image, high-profit margins, and effective rapid innovation processes (Smithson, 2018). The company has also established both horizontal and vertical integration which leads them to have some competitive advantages that other companies don't have.

Weaknesses

According to Smithson (2018), Apple Inc. does have some weaknesses, such as they have a limited network when it comes to distribution, the company’s prices are typically on the higher side, and the company is pretty dependent of the sales on high-end market segments. Apple is mostly known for their iPad and iPhone products which can be a great branding opportunity, but it can also be a disadvantage because it can lead to some risks for the business (Apple Inc, 2015). Companies that have a smaller amount of products run the risk of hitting their peak when it comes to marketing those products and can eventually struggle financially. In order to bring in more revenue, the company might need to revise current products or create new ones in order to be successful.

Opportunities

Within the last few years Apple Inc. has shown to be a very powerful company when it comes to the opportunities that have come their way, and the quality of products they have been able to produce. According to Eassa (2018), Apple Inc. has several growth opportunities coming up in the future due to how successful the company has been, and due to the amount of money, the company makes. In 2017 alone the company made roughly $230 billion in revenue and about $50 billion in net income (Eassa, 2018). The Apple Watch has proven to be very successful in 2017, which means it provides an opportunity for more features and expansion to happen in the near future (Eassa, 2018). Other growth opportunities involve Apple Inc.’s audio products and their services; for example, with Apple’s audio products there are opportunities for more Beats products to be created, different types of headphones and earphones to be invented, and for the newest product, the Homepod, to be improved and promoted (Eassa, 2018).

Apple Pay is another semi-new mobile payment service that the company launched in 2014 which works on some of the company’s newest iPhones. This feature is projected to provide new opportunities and growth for Apple, Inc. as time goes on. Cell phones have continued to evolve, so Apple has the opportunity to continue their development and expansion of the iPhone and/or smartphone.

Threats

One of Apple’s biggest threats is the competition that the company faces. The next section of this paper will go into more depth regarding the competition that Apple faces, but the company faces big competitors such as Google, Samsung, and even Microsoft (Apple Inc, 2015). In addition to these competitors, Apple also faces threats overseas due to other countries expanding their own companies that are similar in nature to Apple. India has very strict laws when it comes to operating business there, so this causes some issues for Apple to establish a location to sell their products (Apple Inc, 2015).

Competition

While Apple, Inc. is a very successful company, they still face competition like any other company. According to Bhasin (2017), Apple’s top 5 competitors are Dell, Lenovo, Samsung, Hewlett Packard, and Microsoft. Each of these companies holds different reasons as to why they are strong competitors for Apple, but Dell is known for competing with Apple when it comes to their computers and/or laptops. Lenovo competes with Apple because the company has many similar products, such as laptops, smartphones, and even tablets (Bhasin, 2017). Samsung is one company that many consumers are familiar with due to the fact that the company offers a variety of products. Apple is in direct competition with Samsung when it comes to their smartphones; for example, the Galaxy and the Note are two of the most popular Samsung phones, which has had an effect on iPhone sales (Bhasin, 2017). Hewlett Packard is another popular company that focuses on selling desktop computers, laptops, printers, scanners, and other computer related items. According to Bhasin (2017), HP Inc. is one of Apple’s strongest competitors when it comes to the Macbook and other laptops. The last major competitor is the Microsoft Corporation which extremely well known by consumers, especially those that are utilizing a computer to do any work on Microsoft Word, Excel, or PowerPoint. What is actually quite interesting is that while Microsoft is considered to be Apple Inc.’s competitor, many Apple computers are ran using the Microsoft operating system (Bhasin, 2017). One thing that Microsoft has over Apple is the fact that the company has created software for video games, along with other products such as the Xbox.

These five companies are only the top 5 competitors that Apple, Inc. faces daily, but there are a lot more. For example, the company also faces competitors such as Sony, Asus, Acer, Toshiba, and Pixel (Bhasin, 2017). One way that Apple, Inc. can remain competitive in the electronic, smartphone, computer market is to stay on top of the market trends and listen to what their customers are saying.

Management Team/Leadership

Each company has a management team of some sort that assists in managing and running the business. Initially, Apple started as a smaller company that didn’t require as many managers or leaders, but since then has grown to be such a large company that it does need more people to assist with running it. Tim Cook is the current Chief Executive Officer who is responsible for managing the operations and sales of the company. Apple, Inc. also has many individuals who are on the Board of Directors who assist the CEO in running the company and making sure that business runs smoothly and efficiently. For example, the Senior Vice President, the Chief Design Officer, the Chief Operating Officer, and the other Vice Presidents all report to and work under the CEO, Tim Cook. According to Tim Cook, employees are sent through a thorough orientation process upon being hired which is known as Apple University (Baer, 2015). Cook also mentions that it is up to the “company leaders to set the tone” in order for the company to operate properly (Baer, 2015).

Financial Outlook

As previously mentioned, Apple has had a lot of success over the years as they continue to expand and bring in new products. Market capitalization, profits per share, net profits, share price, and sales led to the company’s income growth (Nicolas Marin Ximenez and Sanz, 2014). According to a recent report from Apple, the company has been successful in 2018 with bringing in $62.9 billion for the quarter, which ends up being about 20 percent higher than 2017 (Apple Reports, 2018). In the last quarter of 2018, Apple’s CEO mentioned that the company was very satisfied to exceed their quarterly expectations and hopes to attain their projections for the fiscal 2019 first quarter as well. In the first quarter of 2019 the company hopes to gain revenue of $89 billion to $93 billion, have operating expenses fall around $8.7 billion, tax rates to be around 16.5 percent, and their gross margin to fall around 38 percent (Apple Reports, 2018). Figure 2 shows how the company has continued to grow from 2016-2018 and also shows their projections for sales, EBITDA, operation profit, pre-tax profit, net income, and more for the years 2019-2021 (Apple Reports, 2018). Apple's value continues to grow and surprise investors, and on August 2, 2018, the company was one of the very first American public companies to surpass $1 trillion in value (CNN Library, 2015). With this recent news and the stability of the company, many investors will likely begin the invest in the company if they aren’t already.

Strategies

Upon creating a company, the owners must discuss what type of strategies they are going to implement in order to help the company grow, make it an enjoyable place to work, receive and retain customers, and ultimately bring in revenue. A generic strategy can be defined as being one that has steps to help put the company into a good position within the industry (Unnamed Author, 2015). Going back to Apple’s mission statement, the company wants to continue to develop new products while also working to enhance the current products they do have on the market. While Apple, Inc. is working internationally, the company would like to continue to expand and establish more stores overseas.

Conclusion

This strategic plan took a thorough look into the history of the Apple, Inc. company, the products, and services that Apple, Inc. provides its customers, along with other examples of how the company operates their business. This plan provides a quick overview of the management team, leadership team, and the departments within the company. Apple, Inc. has had its struggles just like any other company, but as a whole, it has continued to grow into a very successful business. The products that Apple offers draw customers in due to the company’s ability to get ahead of the competition and produce new products that appeal to consumers. Apple’s goal is to create a positive culture for their employees, but also for their customers. With Apple’s strategic thinking and planning in place, along with their high revenue projections for the years coming up, the company is on track to continue to be successful.

References

Apple’s Executive Team. (n.d.). Retrieved from https://investor.apple.com/investor-relations/leadership-and-governance/default.aspx

Apple Inc. SWOT Analysis. (2015). Apple, Inc. SWOT Analysis, 1–10. Retrieved from https://ezproxy.apus.edu/login?url=https://search.ebscohost.com/login.aspx?direct=true&AuthType=ip&db=bth&AN=110492953&site=ehost-live&scope=site

Apple Inc. (n.d.). Retrieved from https://www.newworldencyclopedia.org/entry/Apple_Inc.

Apple Reports Fourth Quarter Results. (2018, November 1). Retrieved from https://www.apple.com/newsroom/2018/11/apple-reports-fourth-quarter-results/

Apple Stores. (2018, November 20). Retrieved from https://www.macrumors.com/roundup/apple-retail-stores/

Baer, D. (2015, March 19). How Tim Cook implants Apple’s culture into new employees. Retrieved from https://www.businessinsider.com/tim-cook-on-apples-culture-and-employees-2015-3

Bhasin, H. (2017, December 17). Top 11 Apple Competitors. Retrieved from https://www.marketing91.com/apple-competitors/

CNN Library. (2018, August 5). Apple Fast Facts. Retrieved from https://www.cnn.com/2014/07/01/business/apple-fast-facts/index.html

Khan, U. A., Alam, M. N., & Alam, S. (2015). A Critical Analysis of Internal and External Environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), 955-961.

Meyer, P. (2018, September 11). Apple Inc.’s Organizational Culture & Its Characteristics (An Analysis). Retrieved from https://panmore.com/apple-inc-organizational-culture-features-implications

Nicolás Marín Xim©nez, J., & Sanz, L.,J. (2014). Financial decision-making in a high-growth company: The case of apple incorporated. Management Decision, 52(9), 1591-1610. Retrieved from https://search-proquest-com.ezproxy2.apus.edu/docview/1651365093?accountid=8289

Operations. (n.d.). Retrieved from https://www.apple.com/jobs/us/teams/operations-and-supply-chain.html

Richardson, A., & Terrell, E. (2008, April). Apple Computer, Inc. Retrieved from https://www.loc.gov/rr/business/businesshistory/April/apple.html

Rowland, C. (2018, August 25). Apple Inc.’s Mission Statement and Vision Statement (An Analysis). Retrieved from https://panmore.com/apple-mission-statement-vision-statement

Smithson, N. (2018, August 31). Apple Inc. SWOT Analysis & Recommendations. Retrieved from https://panmore.com/apple-inc-swot-analysis-recommendations

Think Marketing. (2016, January 11). Have you ever read about Apple’s core values? Retrieved from https://thinkmarketingmagazine.com/apple-core-values/

Unnamed Author. (2015). Mastering Strategic Management. Retrieved from https://apus.intelluslearning.com/lti/#/document/112675645/1/46c23f8b378f479291c9d5462673397b/d7f644a1fcfc8198244746cb734e3b26/browse_published_content/8515/49410/68093/1/lesson/lesson?hideClose=false&tagId=41793&external_course_id=380506&external_course_name=BUSN620%20I001%20Fall%2018

Williams-Grut, O. (2015, January 29). Apple’s iPhone: The most profitable product in history. Retrieved from https://www.independent.co.uk/news/business/analysis-and-features/apples-iphone-the-most-profitable-product-in-history-10009741.html

Appendix

Figure 1

[image: ]

Note: Organizational structure of Apple, Inc. Retrieved from https://research-methodology.net/apple-organizational-structure-a-hierarchical-structure-that-may-change-in-near-future/

Figure 2

[image: C:\Users\Cayla PC\Downloads\FireShot\FireShot Capture 004 - Apple _ Financials, _ - https___www.marketscreener.com_APPLE-4849_financials_.png]

Note: Annual Income Statement Data from 2016-2018 with projections for 2019-2021. Retrieved from https://www.marketscreener.com/APPLE-4849/financials/

Cite this page