Apple Sales Case Report : Apple Inc. Essay

In 1996, Apple was a struggling company that had lost more than 70% of its market capitalization in the past decade. Apple’s sales had fell dramatically and their new personal computers weren’t particularly popular with consumers. The return of Steve Jobs to the company was a turning point for Apple and initiated a new era for the firm. With the launch of innovative products such as the iPod, iPhone and iPad, Apple became the biggest brand in the world. Now it remained to be seen if Tim Cook would be able to continue to develop new products and maintain Apple’s success.

Revenues are recognized in a net basis and only commissions they retain from each sale are reflected under the company’s financial statements.

High level, intense rivalry may result with profit lost for the company. In most cases, new entrant barriers are high due to the intensity of rivalry (Porter, 2008).

The ‘five forces’ model was created by Michael Porter of Harvard University and consists of three horizontal forces of competition, as well as two vertical forces of competition. The horizontal forces of competition are comprised of: 1) the threat of new entrants; 2) the threat of rivals who have already been established; and 3) the threat of substitute services or products. The vertical forces of competition include the bargaining power of customers, as well as the bargaining power of suppliers.

Apple has prospered internally and it is necessary to consider both strengths and weaknesses. Apple has lots of strengths, the major of them being it’s impressive brand reputation, Apple managed to position the brand as “premium products” for “elite” people. Customers are loyal and tend to stay in Apple’s ecosystem. Apple’s self-reinforcing ecosystem, it has a diverse ecosystem which integrates various hardware and software products into one large interactive space. Status of top innovator, Apple is perceived as the leading innovator and its products are highly anticipated. Apple’s very strong financial performance, high profit margins and very high liquidity. It’s network of retail stores, high-quality customer service helps to create advanced user experience. A powerful marketing strategy, Apple’s team masterly uses various marketing techniques to create a hype for their products and to strengthen the brand.

Issue 01: Steve Jobs is now gone - can they do it without him in the long term?

The five forces model helps determine an industry’s attractiveness and long-term profitability. The five forces are: degree of rivalry within the industry, the threat of substitutes, the threat of new entrants, bargaining power of buyers, and bargaining power of supplier.

Competitive rivalry force used to examine how intense the competition of the company currently in the marketplace. When the competitive rivalry is high, it means that there are few businesses are provided the same or equally

The five forces analysis helps in identifying and determining the attractiveness of an industry, the source of competition. And because Porter's five forces reveal insights on profitability, it can inform important decision decisions about whether to leave or enter industries or sectors. Moreover, the model can be used to compare the impact of competitive forces on the own organization with their impact on competitors. Competitors may have different options to react to changes in competitive forces from their different resources and competences (Pearce and Robinson, P.92). This may influence the structure of the whole industry.

Apple Inc. is a very well known tech company that was founded in 1977 by Steve Jobs and Steve Wozniak. It offers a variety of services, such as designing, and manufacturing. Moreover, products known or used by consumers today are the Mac, iPhone, iPad, iPod…etc, basically anything that starts with an “i” is owned by this company. Furthermore, Apple is listed on the New York city Nasdaq 100 stock exchange index, which is composed of the top 100 tech companies in the U.S. It’s IPO was in Dec 12th 1980, they sold 4.6 million shares at the value of $22 per share, which is worth $97 per share today. Apple’s current Market Capitalization is $542 Billion dollars, which is calculated by multiplying the share price by the number of shares outstanding which will give you an indication of what it’s worth in a particular day after the market close. Moreover, I believe that Apple’s best strategic decision was made back in 2003 when iTunes was launched for windows, before this decision their programs only worked on Apple products. The launch of iTunes was the start of iPods being used by window users. This innovation led to the iPhone, and starting from that point consumers began to trust their products, and completed the full package of Apple products by buying the Macintosh. In addition, by studying and using the various valuation methods and ratios, such as Profitability ratios, operating returns, Leverage ratios, Liquidity ratios, Efficiency ratios, and Valuation ratios; I was able to

The Porter`s five forces are threats of new entrants, the bargaining power of buyers ,product substitution and intensity of rival of rival among competitors .These forces measure the competitiveness of the market and also helps the company to identify strategies to use to penetrate such and gain market share.

Porter’s five forces are used to determine the competitive intensity and attractiveness of a market. These are close forces that affect a company’s ability to make a profit and serve customers. If any of these forces change, a company must reassess its marketplace. The five forces include: the threat of substitute products, the threat of the entry of new competitors, the intensity of competitive rivalry, the bargaining power of customers and the bargaining power of suppliers.

Apple Inc. has launched its iPhone in January 2007 (telegraph) as a new product in the market with latest technology and it was the first multi touch smartphone adding the feature of iPod and received an overwhelmed response by selling 270000 units. It had created a new record for a new company like apple, iPhone had laid a stepping stone for the success of Apple and till this time iPhone is the best seller product of Apple Inc. during first quarter of 2016 apple has sold over 74 million iPhones worldwide. (statista, 2016).

Analyzing the computer industry from 1995 to 2005 seemed to be like analyzing a game of chest between the major competitors. The development is noticeable and the shaping of different corporate strategies could be sensed easily thanks to the different approaches toward the movement of the industry that the companies had; some of them shaped it, some followed it and some helped it grow. In order for us to analyze the computer industry during the up said time period, we will consider porter's five forces analysis, though static, it helps improve one's understanding of the setting and the conditions of such. Porte's five forces constituted the analysis of the new entrants to the industry as the

The 5 forces are the environmental forces that impact on the companies ability to compete in the given market. The purpose of 5 forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.