Apple Analysis

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Apple company history dates back to 1976 when Steve Jobs and Steve Wozniak decided to realize the idea of Wozniak. He had designed a machine that was an electronic consumer, so Jobs sought to form a company to sell that machine. Since they had a place to stand, used the garage of Steve Jobs and that was where the business started Apple and sold their first Apple 1 machine at a cost of $ 666 each, but the cost seemed high. Despite what seemed limited to the company, a critical point which was the appearance of Mike Markkula, a millionaire Withdraw who promised to invest in the company, so that Jobs and Wozniak approached agreed to participate. Apple started with their innovations to incorporate your product, Apple II, items than any other computer of the time contained. With this the end of 1980 it had sold too many computers became leader in its industry. But he could not maintain that pace of growth due to failures that occurred in their products, which Jobs did not seek to resolve, and having the first losses as a company, the board chose to run the founder. With changes in the company, and improvements in the machines in 1990 they achieved sales of $ 5.600 billion and increased its global presence. After losses at the end of the decade of the 90s, it was left as CEO Steve Jobs. A firm alliance was looking for Bill Gates to continue offering Microsoft Office for Mac. Constant innovation was the crucial tool for Jobs to make the company reborn. He found areas of opportunity in the market, so they decided to launch products like the iPod in 2001. Six years later they managed to launch another major product, the iPhone, and later what the iPad. (Hill 2011)

The Apple business model is based on an income from selling their products, licensing the use of its software, and subscription fees. Where key business partners are its manufacturing, developers and programmers, service providers and entertainment industries such as film and music. Its key activities are in design that make the software development, quality control, and manufacturing of its products. Its key resources are its human resources. Its value proposition is in the design of their products, their brand, performance and convenience of their products and services. Its market is aimed at a mass market that it leads him to have a cost structure of economies of scale, and will reach them through online distribution, their own stores or other retailers. (Digital Business 2013)

One of the main strengths of Apple’s brand value has created over the years. Such strength allows you to have a leading position in the market for its consumers that any product or service that is accompanied by his mark is likely to acquire. Such consumer loyalty allows them to constantly bring new products, because they know there will be a certain number of consumers who will buy whatever the company put on the market. Another strength that has generated is that they have built an ecosystem of products and services that sometimes require that necessarily have to buy other products of the same company to work properly, or at full capacity. One of the weaknesses of Apple is that the cost of some of its products may be too high for some markets, such as emerging markets are where perhaps acquire high-priced products is not an option to achieve economies of scale. This limitation by price leaves at a disadvantage against competitors who do have access to markets that are more elastic in a matter of price. (Euromonitor International, 2013)

The consumer electronics industry is constantly changes due to innovations that present themselves strongly by all companies that comprise it. Apple being one of the leaders can not stay out of what is happening in the industry. One of the opportunities is to venture to the development of new products such as electronics that can be used as clothing. They could also use trends in the emerging service platforms payments via mobile devices. Apple already has an infrastructure in innovation and development that will likely help generate such creations position to win over their competitors. Among the threats they have great strength with rival companies and focusing on products with more affordable prices, so they can more easily enter markets. Another threat could become complacent in your organization, and not keep pace with innovation that succeeded in command of Jobs, which could have a negative effect on the company. (Euromonitor International, 2013)

For the competitive positioning of Apple product differentiation continued. This strategy have been achieved thanks to its strength as a company, and the high technological innovation that is transmitted within their products and services. The differentiation pursues business strategies that allow you to create a unique product that customers perceive as different or distinctive in some way. The less the company looks like its rivals, is more protected from competition and the greater its market appeal. (Hill 2011) This competitive positioning has been the differentiating by brand Apple, which has distinguished itself as an innovator and leader in its industry, being a different company in the electronics sector, it has generated value and that it has resulted in customer loyalty.

In an interview with Apple CEO Tim Cook, he mentions that his company believes that your company is in the face of the earth to create great products and that does not change. They are focused on innovation, and believe in the simple and not in the complex. They believe they need to have and control the primary technologies behind their products, and participate only in markets where they can make a significant contribution. They believe in saying no to thousands of projects so that they can focus on a few that really matter and are valuable to them. They believe in deep collaboration and hard work of its groups, which allows them to innovate in ways that others do not. Your company will not settle for anything unless it is excellence in each group company, and have the honesty to admit when something is wrong and dare to change it. No matter who is doing the work, those values are so inside the company, which makes Apple is doing so well. (Forbes 2012) In the search for a mission or vision statement within the company, could not be found because it is mentioned that have not declared a formal position. But, in the words of its CEO, it is implied that offer their high-quality technology products and stay within their standards of innovation makes Apple the company it is today now. The direction in which the company is always changing, so keep it competitive advantage in their ideology, which is innovation. Based on the adaptation to changes to innovation, Apple will maintain the advantage that they can be a specialist in solutions for the consumer to have a focus of constant change.

Apple offers a different range of products and services. A key for Apple to be successful is that it gives the consumer a total experience creating an ecosystem around its core products such as the hardware, services, content apps, computers, and other portable electronic devices. All this diversification could be categorized within a related diversification. Such diversification is a corporate strategy based on the goal of establishing a business unit in a new industry that is related to the existing business units of a company by some form of similarity or relationship between the value chains of units of new business and existing. The multibusiness related diversification model is based on leveraging the strong technological similarities, manufacturing, marketing, and sales between units of new and existing businesses that can be modified or adapted successfully to increase competitive advantage. (Hill 2011) Utilise various key resources they have, their distribution channels, and especially the power of the brand enabled them gradually be generating the ecosystem covering different consumer needs, but at the same time have different product types were creating the need for other products of the same company were acquired to achieve the maximum experience have consumer use. That ecosystem already mentioned as a fortress, it was thanks to the diversification that have succeeded in each of the products and services. Also extend this line of products and services led them to economies of scope. These economies arise when one or more of the business units of a diversified company are able to achieve advantages of differentiation or cost savings because they can share, assemble and use more efficiently the resources or costly capabilities, such as personnel, equipment, facilities, distribution channels, advertising and research and development laboratories. (Hill 2011) With all that planning had to be developed thanks to the strategy of diversification and differentiation of products and services for attaining those goals that will position as one of the leaders in its industry.

In the analysis of financial statements for the year 2012, the company filed a return on assets of 72%. With this we can say that the total assets employed by the companies had a big advantage, because almost all were able to generate the same proportion in size. Moreover, the return on shareholders’ equity was 35%, so the investment of these funds generated higher returns than could occur in other investments. (Yahoo Finance 2013)

Liquidity ratios in Apple’s ability to cover was measured with short-term obligations. In the current ratio it was obtained that based on its total current assets can cover 1.49 times its current liabilities. What at first seems to see no short-term problems to finance such payments to suppliers or any other element. However, the acid test brand that Apple has 0.98 times to cover their debts, which means that to do so would be very limited, and would barely pay in full. Apple generated cash totaling $ 931 million in cash flow. This compared with that in 2011 had a negative of $ 1,466,000 can be viewed in a positive way. The importance of liquidity for businesses, becomes relevant when resources are needed to invest in new products, processes and innovations that will enable the company to improve its competitive edge. It is important that Apple continue to maintain growth in this flow so that in the future to fully cover its debts to reduce risk, and increase the possibility of investments that can be profitable in the near future. In the reasons for collection and payment periods, Apple has a reason 49 days it takes to collect and 133 that are slow to pay. So this relationship is positive, being faster than they can be paid. The value in books Apple currently is $ 3.77, which compared with $ 3.80 of Microsoft could say that the difference is almost zero, and that the growth prospects of both companies in the future is the same. Compared with another company Samsung, which competes hard against Apple, its book value is $ 1.42, so there are higher expectations for Apple on the Korean company. (Yahoo Finance 2013)

References

Digitial Business (2013) Analysis of Apple business model. Obtenido de  http://www.digitalbusinessmodelguru.com/2013/02/analysis-of-apple-inc-business-model.html
Euromonitor International (2013) Apple Inc in Consumer Electronics. Obtenido de http://0-www.portal.euromonitor.com.millenium.itesm.mx/Portal/Pages/Analysis/AnalysisPage.aspx
Finance Yahoo (2013) Income statement annual Apple. Obtenido de http://finance.yahoo.com/q/is?s=AAPL+Income+Statement&annual
Finance Yahoo (2013) Cash Flow Apple. Obtenido de  http://finance.yahoo.com/q/cf?s=AAPL+Cash+Flow&annual
Finance Yahoo (2013) Balance Sheet Apple. Obtenido de  http://finance.yahoo.com/q/bs?s=AAPL+Balance+Sheet&annual
Finance Yahoo (2013) Key statistics Apple. Obtenido de http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics
Finance Yahoo (2013) Key Statistics Samsung. Obtenido de http://finance.yahoo.com/q/ks?s=BC94.L%2C+&ql=1
Finance Yahoo (2013) Key statistics Microsoft. Obtenido de. http://finance.yahoo.com/q/ks?s=MSFT+Key+Statistics
Forbes (2012) Be visionary. Thinkg Big. Obtenido de http://www.forbes.com/sites/patrickhull/2012/12/19/be-visionary-think-big/
Hill, Charles (2011) Administración estratégica, un enfoque integral. Cengage Learning

 

Apple Analysis
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