Case Study : Apple Inc. Essay

Apple Inc. has provided many innovative and creative products to consumers over the years. Many industry analysts want to know if Apple can sustain its growth and defend against new competitive threats. Apple lost their CEO Steve Jobs in 2011 to

• 1990: In this year Apple sales reached $5.6 billion its global market share which had fallen recently due to IBM has picked back up and stabilized at 8%. The company had a strong balance sheet and was the most profitable personal computer manufacturer’s in the world.

Apple has a strong financial foundation which allows company growth and allows them to maintain the competitive edge.

This improves the businesses financial position, such as liquidity and solvency. Ultimately, this has ensured Apple 's overall success, as these profits are reinvested into the business, resulting in improved operations, marketing, and HR practices.

1. Specify the nature, structure, and types of products or services of Apple, and identify two (2) key factors in the organization’s external environment that can affect its success. Provide explanation to support the rationale.

Throughout the past year, Apple stock has had an astounding growth of 45% over the past twelve months, as well as a 10% growth of dividends by 10%. This increase in dividend is expected to increase by 7.43% over the next 12 months. Along with stock price and dividends, earnings per share is also expected to rise. Earnings per share is expected to rise from the current amount of $1.88 to as high as $10.74 per share. Apple’s marketing strategy is designed to keep stock prices high and shareholders happy. This growth in Apple stock is expected to continue to rise with a median change of 8.7% in the next twelve months. The current state of Apple stock is very impressive and market predictions show that it should become even more impressive in the next twelve months. (Financial Times

The question is whether Apple strategy will continue proving efficiently innovative. Historically Apple suffered of some kind of a crisis every decade. Another key issue is the strong focus on the development of the

General perceptions of Apple as a cashed up, financially dominant company are not without basis. With $194bn in cash and marketable securities, Apple executives would need to consider if they really need the money and what use would an extra 1.25bn in Swiss Francs be to them. However, they need not look further than Apple’s “Capital Return Plan”, where Apple have “executed (their) capital return program aggressively, and (they’ve) now taken action on over $112 billion of our $130 billion program.”(Luca Maestri, Apple SVC & CFO, Transcripts,

Apple Computers is a well-established and highly profitable company that has several leading technology- and computer-based products on the market, and that retains a highly loyal consumer base in its niche personal computing market (Yahoo Finance, 2012; Hoovers, 2012). Though the company faltered for some time in its history, it has again reached the pinnacle of innovation and progress in the computing and technology industries, and its product rollouts constitute some of the most anticipated and avidly watched events each year by early adopters and investors alike (Yahoo Finance, 2012; Hoovers, 2012). Despite the recent passing of Steve Jobs, one of the company's founders and the company's CEO and public face during the company's resurgence over the past decade-and-a-half, most projections for the company are optimistic in both the short and long terms (Yahoo Finance, 2012).

Apple Inc. always wants to be in the increase sales non decrease situations. When Apple

Apple currently has 16,958 million dollars of long term debt according to the U.S. Security and Exchange Commission (2013).

There are various threats in the external environment that influences Apple. Rapid technological development and change is a problem, the company might be set aside by a competitor who invents a newer technology. Tax increases have also influenced Apple. Apple’s profits went down due to new taxes. Patent breaches pose a huge threat, competitors might imitate their technology and make profit on these features. Appreciation of the dollar, Apple’s profits in foreign countries are reduced due to strengthening the dollar. The growing popularity of Android, widespread use of this operating system makes Apple’s infrastructure less attractive for customers. Increasing labor costs in Asia, the protests of workers in Asia, especially Foxconn

Further, in 2012 net income increased to $41,733,000,000. This shows that while the industry was declining, Apple was able to stay strong and profitable.

There are several ways in which Apple could deal with the varied choices that it is facing. I believe that instead of introducing a new type of capital such as preferred stock, Apple can steadily increase its dividend quarter by quarter. This will attract new type of investors to the stock i.e. those that seek regular income such as pension funds, retirees etc. Increasing dividend would also signal that the Company is confident of its future growth plans because dividends are somewhat “sticky”. A new type of investor along with greater confidence that Apple might project through its commitment to increase dividends might lead to a boost in the share price. If Apple feels that it needs to return cash right now rather than showing its

In return, they have a strong financial backing, brand reputation, strong marketing and advertising teams. Apple plans to take these strengths and prosper off of them. Taking the amount of brand awareness they have built along with their benefit of retail stores the company can plan to use their strong marketing and advertising teams to launch a new product.