Research Paper on "Apple Computers, Inc. Business Analysis"

Research Paper 7 pages (1934 words) Sources: 4

[EXCERPT] . . . .

Apple Computers, Inc.

Business Analysis

What have you learned about the company by reviewing each statement?

By reviewing Apple's balance sheets, I learned that the company has an impressive financial standing. Apple's balance sheets continue to be impressive, with a fourth quarter net income of " U.S.$546m for the three months ended September 30th, an increase of 27% as compared to the fourth quarter of 2009, and ahead of expectations" (Economist Intelligence, 2010, para 24).. For the full year Apple shipped "1.6m Macintosh computers and 8.7 million iPods during the quarter, representing 30% growth in Macs and 35% growth in iPods over the year-ago quarter. In the U.S., Apple zoomed past Toshiba to place fourth in the PC vendor rankings for the third quarter of 2010" (Economist Intelligence, para 25). As of late November, however, Apple had not released full-year financial figures, stating it been forced to delay the "SEC filing of its annual report due to an ongoing investigation into its pricing of stock options for employees" (Economist Intelligence, 2010, para 27). As a result of the investigation, Apple has also warned that it may have to recalculate several years of past financial results (Economist Intelligence, 2010). The most interesting fact about this request is that it has not harmed the company's production. The company is continuing to product products at a high rate, and companies continue to invest in Apple. Apple has achieved an excellent reputation overall as an incredible seller of technological products.

Is there information in any of these statements that concerns you? If so describe what it is and what it concerns.

Of course, while none of the information personally concerns me, I find the overall budget increase and statistics fascinating. Part of their strategy is their ability to focus clearly on one product, making it the successful focus, such as when they developed the iPod, and then moved onto the iPhone. Their ability to focus on an individual product to make it the best has been a cornerstone to their new, successful philosophy in the past decade. Most of the items they have created, starting with the iPod, are items most individuals feel they cannot live without. To make a personal observation, for instance, I do not know anybody, anymore, that does not own an iPod, and this includes people I would never consider as technologically savvy or even interested in such a product. I also owned an iPhone for a number of years and have since moved onto the Droid X, but I felt that the iPhone, at the time that I owned, it, was the best piece of technology I owned, since I had the ability to film, take pictures, check Email, listen to music, watch videos, play games -- and a variety of other features -- in my phone. Apple is really the innovator here when it comes to Smartphones and interesting applications, although a number of retailers have now mimicked them.

How can management use this information moving forward?

Management can continue to use this information by continuing to be creative and innovative, which seems to be Apple's key to success in the technological market. . For example, when Apple brought the iPod to the forefront, very quickly it seemed as if everybody needed to own one. Now, people seem to be unable to live without. Apple revolutionized the way individuals get music; instead of buying CDs, they can now buy MP3s and get their music instantly on their iPod. For some reason, no other company had every thought of doing this and making music so easy for people to obtain and enjoy. The music industry also substantially benefitted from the introduction of this product. Apple continued its trend to innovation with the iPhone, becoming the primary inventor of the concept of the Smartphone. Now, both the iPod and iPhone have been somewhat copied by other firms trying to compete with Apple.

What was Apple's strategy overall? Davaila et al. (2006, para 36) explains it as:

it was the strategy of combining technology change and business model change into a one-two innovation punch. And the iTunes/iPod combination is only starting to generate new concepts; one of the latest is an iPod special edition with U2 (the famous rock band), which opens up rich partnership opportunities with content providers. Apple has put its mark again on the direction of the PC industry -- a mark that will be tough to erase (Davila et al., 2006).

Therefore, to end this analysis, Apple's financial information can be used to prove that as a company, its focus is working. Therefore, the strategy discussed above should be continued, as there is no reason to revise an already successful strategy.

This is not to say that Apple does not have its competitors; in fact, many technological companies tend to copy Apple's technological innovations and revise them to fit slightly different needs. Apple's "leader of the pack" mentality, however, has given it the edge it needs over its other competitors, like IBM and Sony. There is something to note, however, about the way Apple does things. According to Davalia et al. (2006):

However, Apple is susceptible to a supply risk for key components. IBM is currently the Apple's sole supplier of the PowerPC G5 processor, which is used in its current Power Mac, Xserve, and iMac G5 products. Freescale is the sole supplier of the G4 processor, which is used in the company's eMac, Mac mini, and portable products. IBM experienced manufacturing problems with the PowerPC G5 processor, which resulted in delaying the shipment of various products and constrained certain product shipments during the second half of 2004 and the first quarter of 2005. In a market where speed to market is critical, Apple's dependency for key components could put it at a competitive disadvantage.

Summarize the company's financial health. How does it compare to other companies in the industry?

Apple is financially healthy, as the statistics above demonstrate, and as they continue to implement new strategies and creative products that leas the technological market. As noted above, Apple compares to companies in the industry, its main competitors being IBM and Sony, because it manages to stay a step ahead of its competitors, creating very innovative products. This ability to "be the first" and to produce such wonderful products has done much to boost Apple's reputation over its competitors, leading to its financial health. Overall, Apple is the technological leader, and because of its ability to be innovative, it will probably retain that edge.

Include a summary of the company's technological advantages, or lack thereof, in comparison to at least two other companies in the same industry.

The advantage Apple has is its ability to focus on one product, and to create products that people feel they cannot live without. In comparison to Apple's main competitor, Microsoft, Apple is clearly leading the way with new and innovative products. Another one of Apple's competitors, Dell, is also lagging behind. Neither Dell nor Microsoft has ever shown the creativity or capability of Apple -- meaning, Apple's new products generally lead the way, and then companies like Microsoft and Dell mimic those creations. Apple always seems to be the first in line with new, innovative technological products that individuals come to rely upon. This is also true of the other competitors mentioned above, IBM and Sony. While Apple occasionally relies on these companies for products, Apple manages to stay ahead of the pack once again with its creativity.

Bench-market Analysis

What is Apple's bench-market analysis? According to Jones (2004, p. 45):

Decision-making in an organization ultimately depend on its superiors. An organization's hierarchy emerges when an organization, like Apple, experiences problems in coordinating and motivating employees. As an organization grows, employees increase in number and begin to specialize, performing widely different kinds of tasks; the level of differentiation increases; and coordinating employees' activities becomes more difficult

Jones also tells us (2004, p. 45) "Apple Computer used the functional organization model to great advantage when it produced only Macintosh computers and sold them through computer dealers." Apple did expand its focus like many other computer companies at the time, creating laptops, palmtops, and the like. Because Apple branched out, it abandoned this somewhat single minded focus on management.

In the 1990s, the technological market was very different. According to former chief executive John Sculley, "It's highly likely that by the time I eventually retire from Apple, it will be a completely different kind of company. But not in terms of its vision and core competency, which is to change the world by making sophisticated technology approachable to normal people" (Cooper and Press, 1995, para 15). Furthermore, "in Apple's 1976 business plan, this was linked to the ambition of being the first recognized leader in the PC market with a market share double that of its nearest competitor' (Cooper and Press, 1995, para 36)

In the 1990s, Apple realized that people needed different types of computer equipment for their computers, and this… READ MORE

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