Ateneo de Davao University
E. Jacinto St., Davao City
Apple Inc.
A Strategic Management Audit
Presented to the Faculty of School of Business and Governance
In Partial Fulfillment of the Requirements for the Subject
MGT 4259 – Strategic Management
Presented to:
PROF. ALEXES ANNE CRUZ
Presented by:
CHRISTINE GRACE SUAZO
MARY DANIA SULLANO
LOUISE DIANNE PAULLETE TAPANAN
MARION JAMES TARNATE
VILLE MARGARETH TINNAE
ANGELA BEATRIX TIU
March 2023
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EXECUTIVE SUMMARY
This case study examines the business climate in which Apple Inc. operates to
determine the company's strengths, weaknesses, opportunities, and threats. This paper also
describes how the firm has been successful in the technology business by creating and
implementing competitive strategies. As a result, this paper examines Apple Inc.'s competitive
standing in the technology market through a macro-environment analysis, company analysis,
and financial performance analysis.
Apple is part of the top five tech companies. It has been one of the world's most
valuable technology companies since 1976. Apple makes iPhones, iPads, Macs, and
wearables. The company earned $111.4 billion and employed 165,000 in 2020. Apple sources
components from over 200 manufacturers. The company targets middle- and upper-class
people willing to pay extra for high-quality products. Over 85% of iPhone owners plan to buy
another one, and they're financially secure and loyal to Apple.
Apple has a solid competitive position in the smartphone industry due to its brand
reputation, innovation, and scale of operations. Even so, its competitors have constantly
challenged it. Nevertheless, the company scored the highest of 3.50 in the Competitive Profile
Matrix (CPM), indicating its solid competitive positioning compared to its competitors, Samsung
(3.42) and Microsoft (3.20). In addition, Based on its ratings (IFE - 2.91 and EFE - 3.02), Apple
Inc. has a solid internal and external position to meet or exceed industry demand and
expectations. Moreover, Apple has a stable internal position in IE Matrix, with its IFE and EFE
scores at 4.0. Hence, the analysis suggests that Apple has the potential to continue to grow
and succeed in the future by focusing on these strategies.
Despite that, the company's operations and facilities are exposed to several risks, such
as natural disasters, terrorist attacks, and cybersecurity threats, which can adversely affect its
business. Additionally, the company depends on global economic conditions and outsourcing
partners to supply and manufacture components and finished goods. Furthermore, the
company is exposed to potential liabilities and reputational harm related to environmental,
social, and governance considerations. The technological forces in the market are highly
competitive, characterized by price competition, short product life cycles, and evolving industry
standards.
At the end of this paper, several recommendations were proposed, including prioritizing
sustainability, customer satisfaction, and innovation in the company's vision and mission
statements, expanding the Self Service Repair program, and diversifying its manufacturing
base. By taking these actions, Apple can continue to innovate and meet the evolving needs of
consumers while mitigating risks and challenges that can impact its business.
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ACKNOWLEDGMENT
The completion of this strategic management audit involved the invaluable efforts and
contributions of many people. We humbly express our deepest gratitude and appreciation to
the following people who have been a part of the successful journey of this paper:
First and foremost, to our Almighty God, for His never-ending grace and guidance all
throughout the process of completing all our endeavors.
To Prof. Alexes Anne Cruz, our Strategic Management professor, for responding to our
requests, for consultations that significantly guided us in doing our paper. Further, for
wholeheartedly sharing her expertise in helping and guiding us throughout our journey in this
subject. Your tantamount guidance and supplement of technical and practical knowledge
helped us fulfill our research paper with excellence.
To Mr. Rizaldy Solarte and Mr. Ethan Cenabre, our Strategic Management Audit
Defense Panelists, for imparting relevant feedback and recommendations that significantly
improved the quality of our research paper.
To our respective parents, for giving us financial and moral support throughout our
college journey.
To our friends, for the constant, unwavering support and encouragement that kept us
in spirits.
We are forever grateful for your time, efforts, and guidance. We would not have done
this without your unwavering support.
We owe this all to you. Thank you very much!
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TABLE OF CONTENTS
TITLE PAGE
i
EXECUTIVE SUMMARY
ii
ACKNOWLEDGMENT
iii
TABLE OF CONTENTS
iv
LIST OF TABLES
vii
LIST OF FIGURES
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CHAPTER I - INTRODUCTION
1
1.1 Company History
1
1.2 Company Description
2
1.3 Mission Statement
3
1.4 Vision Statement
4
1.5 Core Values
5
1.6 Goals and Objectives of the Company
6
CHAPTER II - ANALYSIS OF THE MACRO-ENVIRONMENT
2.1 PEST Analysis
8
8
2.1.1 Political Forces
8
2.1.2 Economic Forces
8
2.1.3 Social Forces
9
2.1.4 Technological Forces
2.2 Competitive Forces
2.2.1 Porter's Five Forces
2.3 Identification Of The Industry And The Competitors
2.3.1 Competitive Profile Matrix
2.4 Organization’s Opportunities And Threats
10
11
11
14
14
16
2.4.1 Opportunities
16
2.4.2 Threats
17
2.4.3 External Factor Evaluation (EFE) Matrix
18
CHAPTER III - COMPANY ANALYSIS
3.1 Company Profile
21
21
3.1.1 Product
21
3.1.2 Capacity
24
3.1.3 People
24
3.1.4 Pricing
25
3.1.5 Buyers' and Consumers' Profile
25
3.2 Operations Plan
26
3.3 Marketing Plan
28
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3.4 Summary of Strategies
29
3.4.1 Integration Strategies
29
3.4.2 Intensive Strategies
30
3.4.3 Diversification Strategies
30
3.4.4 Defensive Strategies
31
3.4.5 Differentiation
31
3.5 Company’s Strengths and Weaknesses
31
3.5.1 Strengths
31
3.5.2 Weaknesses
33
3.6 Internal Factor Evaluation (IFE) Matrix
34
3.7 Strengths, Weaknesses, Opportunities, and Threats (SWOT) Matrix
36
3.8 Internal-External (IE) Matrix
40
3.9 Quantitative Strategic Planning Matrix (QSPM)
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CHAPTER IV - FINANCIAL PERFORMANCE ANALYSIS
4.1 Liquidity ratios
44
44
4.1.1 Current Ratio
44
4.1.2 Quick or Acid-Test Ratio
45
4.2 Leverage Ratios
45
4.2.1 Debt-to-total-assets Ratio
45
4.2.2 Debt-to-equity Ratio
45
4.2.3 Long-Term Debt-to-Equity Ratio
46
4.2.4 Times-Interest-Earned Ratio
46
4.3 Activity Ratios
47
4.3.1 Inventory turnover
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4.3.2 Fixed Assets Turnover
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4.3.3 Total Assets Turnover
48
4.3.4 Accounts Receivable Turnover
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4.3.5 Average Collection Period
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4.4 Profitability Ratios
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4.4.1 Gross profit margin
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4.4.2 Operating profit margin
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4.4.3 Net profit margin
50
4.4.4 Return on Total Assets (ROA)
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4.4.5 Return on Stockholders' Equity (ROE)
50
4.4.6 Earnings per share (EPS)
51
4.4.7 Price-Earnings Ratio
51
4.5 Growth ratios
4.5.1 Sales growth ratio
51
51
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4.5.2 Net income growth ratio
52
4.5.3 Earnings per share growth ratio
52
4.5.4 Dividends per share growth ratio
52
CHAPTER V - CONCLUSION AND FUTURE OF THE ORGANIZATION
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5.1 Recommendations on Vision Statement
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5.2 Recommendations on Mission Statement
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5.3 Recommendations on Goals
55
5.4 Recommendations on Strategies
56
5.5 Recommendations on Financial Performance
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CHAPTER VI
61
REFERENCES
63
APPENDICES
69
CURRICULUM VITAE
76
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LIST OF TABLES
Table 2.1 Competitive Profile Matrix
15
Table 2.2 External Factor Evaluation Matrix
18
Table 3.1 Apple Products
21
Table 3.2 Apple Products’ Prices
25
Table 3.3 Internal Factor Evaluation (IFE) Matrix
34
Table 3.4 Strengths, Weaknesses, Opportunities, and Threats (SWOT) Matrix
36
Table 3.5 Quantitative Strategic Planning Matrix (QSPM)
41
Table 4.1 Apple’s Current Ratio
44
Table 4.2 Apple’s Quick or Acid-Test Ratio
45
Table 4.3 Apple’s debt-to-total assets Ratio
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Table 4.4 Apple’s Debt-to-equity Ratio
45
Table 4.5 Apple’s Long-Term Debt-to-Equity Ratio
46
Table 4.6 Apple’s Times-Interest-Earned Ratio
46
Table 4.7 Apple’s Inventory Turnover
47
Table 4.8 Apple’s Fixed Assets Turnover
47
Table 4.9 Apple’s Total Assets Turnover
48
Table 4.10 Apple’s Accounts Receivable Turnover
48
Table 4.11 Apple’s Average Collection Period
48
Table 4.12 Apple’s Gross Profit Margin
49
Table 4.13 Apple’s Operating Profit Margin
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Table 4.14 Apple’s Net Profit Margin
50
Table 4.15 Apple’s Return on Total Assets (ROA)
50
Table 4.16 Return on Stockholders’ Equity (ROE)
50
Table 4.17 Apple’s Earnings per share (EPS)
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Table 4.18 Apple’s Price-Earnings Ratio
51
Table 4.19 Apple’s Sales Growth Ratio
51
Table 4.20 Apple’s Net Income Growth Ratio
52
Table 4.21 Apple’s Earnings per Share Growth Ratio
52
Table 4.22 Apple’s Dividends per Share Growth Ratio
52
Table 5.1 3-Year Products and Services Performance Projection
58
Table 5.2 3-Year Cost of Sales Projection
58
Table 5.3 3-Year Operating Expenses Projection
58
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LIST OF FIGURES
Figure 2.1 Porter’s Five Forces of Apple Inc.
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Figure 3.1 Apple’s Operating Process
26
Figure 3.2 Apple Internal-External (IE) Matrix
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CHAPTER I
INTRODUCTION
1.1 Company History
The story of Apple, Inc. began on April 1, 1976, when Steve Jobs, Stephen Wozniak,
and Ronald Wayne founded it. A mutual friend first introduced Jobs and Wozniak in 1971. The
relationship grew closer as they became members of the Homebrew Computer Club. As an
interest, Wozniak manufactured microcomputers that were less expensive than other existing
microcomputers. Steve Jobs recognized Wozniak's abilities, and Jobs convinced Wozniak that,
as a team, they could manufacture personal computers for sale. “Wozniak was the brains with
his designs and natural ability while Jobs could strategically push the computers to market”
(Gadchick, 2012). In January 1977, Jobs, Wozniak, and Mike Markula incorporated the
company as Apple Computers Inc. Mr. Markula funded approximately $250,000 for growth.
Wayne sold his ownership stake back to Wozniak and Jobs for approximately $800.
The company first created the Apple I computer in Jobs' garage. The Apple I differed
from other computers by utilizing a MOStek 6502 processor instead of the industry standard
Intel 8080 processor. Wozniak could utilize the MOStek processor and create the computer
with fewer parts than the industry norm, yielding a lower price than the competition. The original
market demographic for the Apple I was individuals who were interested in computers and
electronics. In 1977, the company grossed approximately $774,000 in sales for the Apple I.
In late 1977, Jobs and Wozniak introduced the Apple II at the West Coast Computer
Fair in San Francisco, CA. The Apple II was developed as a general-purpose computer. The
specs for the Apple II maintained the MOStek 6502 processor. Also, they included color
graphics as well as an audiocassette drive with a storage capacity of 4kb of Read Access
Memory (RAM). The first three years of the launch of the Apple II they have yielded sales of
approximately US$139 million deeming the computer a success.
The company introduced its third computer in 1980, the Apple III. The computer ran
eight applications, but the persistent technical problems caused the removal of the Apple III
from the market. The Apple III was relaunched in 1981 with 128kb RAM, an updated software
system, and a lower price of $3,495. It could have yielded a better campaign.
Apple acknowledged that significant issues with the first three computer models were
each operated under different operating systems and had limited market share. Jobs
recognized the issue and immediately revamped the concept by creating a new computer and
operating system by utilizing the talents of hardware and software designers. This led to the
development of the Macintosh (Mac) personal computer. The Mac was released in 1984, and
its operating system, Mac OS, could run on all Apple computers. The 1984 Mac had 128kb of
memory and a 32-bit microprocessor. The original Mac was smaller, less costly, accessible,
easygoing, and flexible. The computer could be used for graphics, not just calculations, as most
computers performed at the time. “Despite its advantages, the Mac suffered from several
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problems, particularly its lack of compatibility with IBM personal computers, making it difficult
to sell Mac computers to large corporations that were already using IBMs” (Murray, Goode, &
DiMuro, 2009).
In 1984, the company experienced less than stellar performance from the sales of the
Mac. The sales projections for 1984 were moving 80,000 units while only approximately 20,000
were sold. In 1985, Mac sales averaged 2,500 units per month. The Apple board was
dissatisfied with sales, and Steve Jobs left Apple in 1985. Jobs left Apple and decided to start
his venture. He called NeXT, a company dedicated to creating personal computers for students,
and NeXT experienced eight unsuccessful years until finally realizing growth in 1993. “During
this period, Apple was experiencing a decline as competition increased, lack of innovative
products, and hardware and software pricing decreased” (Murray et al., 2009).
In 1996, the current CEO, Gil Amelio, hired Steve Jobs as an informal advisor to Apple
Computers with no contractual commitment. During this same period, Apple also purchased
NeXT from Jobs for $400 million. Starting from the last quarter of 1997, Apple Computers
posted profits in three consecutive quarters and named Steve Jobs as the interim CEO in 1998.
Jobs launched the iMac in 1998. The iMac was marketed directly towards first-time computer
buyers and individuals shifting to Macs from other computer platforms. Steve Jobs was officially
named CEO of Apple Computers, Inc. in 2000. He remained focused on the iMac computers
and gained market share by releasing new models of the Macs.
In 2001, Apple Computers, Inc. introduced the first version of iTunes. iTunes, at the
time, was equivalent to Microsoft's Media Player, which could burn CDs for playback. A few
years later, Apple launched the iTunes Music Store, which allowed customers to purchase
music and would later modify its capabilities to allow Windows users access.
Fast forward to 2007, the company removed ‘Computers’ from the name to become
Apple Inc. The name change was to recognize that their strategic focus was no longer on
personal computers. Apple focuses on multiple facilities of electronic media; iPhone, iPad, iPod,
iTunes, iMacs, Mac Mini, Apple TV, and all platforms revolving around the iOS operating
system.
In January 2011, Steve Jobs announced that he was taking an indefinite leave of
absence due to health issues. The Chief Operating Officer, Tim Cook, took over as interim
CEO. After a long bout with pancreatic cancer, Steve Jobs passed away in October 2011. Tim
Cook was named as the full-time CEO. Under Tim Cook, the company has released iCloud, a
software platform that allows media sharing between multiple devices, iBooks, iPhone 5, and
the recently released iPad mini. Apple has remained a publicly traded company, with most
investment houses classifying the company at 4 out of 5 stars and a strong buy.
1.2 Company Description
Apple is one of the best-known tech companies of all time, one of the Big Five of tech,
and for a good reason. From the latest iPhone to the original Apple computer, the company has
been an ingenious innovator of consumer technologies since its first days out of a home garage.
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Founders Steve Jobs and Steve Wozniak met through a mutual friend. It turned out to be a
fateful meeting that would change the path of modern technology forever. Steve Wozniak
created the original prototype for the Apple I computer—the first computer to resemble the
computer we know today—a model with a large monitor and a keyboard. Jobs saw the
prototype and quickly realized its potential. The two founded Apple Computers Inc. on April 1,
1976 (www.firsthand.co, 2022).
It is a multinational corporation held in the United States of America. According to Curry
(2023), Apple is one of the world's most influential and recognizable brands, responsible for the
rise of the smartphone with the iPhone. Valued at over $2 trillion in 2021, it is also the most
valuable technology company in the world. In 2022, the company generated $394.3 billion in
revenue, 52% of which came from iPhone sales. Product sales are 232 million iPhones, 82
million AirPods, 75 million Apple TV+, 61 million iPads, 53 million Apple Watches, and 26 million
Mac and MacBook units. Hence, Apple services became the second largest division,
responsible for 19% of revenue in 2022, as its division grew by 7.3%.
Apple offers consumer technologies of all kinds. Its most popular products include the
iPhone, iPad, Macbook, and Apple Watch. Apple has 147,000 employees in numerous
departments, including retail, software services, hardware, machine learning and AI, support
and service, design, and more. Apple also offers services like Apple Music, launched in June
2015, and Apple TV, launched in 2019. By 2021, Apple TV had produced two Academy Awardnominated features, Wolfwalkers for Best Animated Feature, and Greyhound for Best Sound.
Apple also provides products and services curated explicitly for education, business, health
care, and government. After Steve Jobs left his post as CEO in 2011, prior to his death, Tim
Cook took on the role. As a top member of the Fortune 500, Apple is one of the world's largest
technology companies, and its catalog of offerings continues to grow.
Not only is Apple tech-savvy, but it is also business savvy. Apple has made some vast
acquisitions and investments throughout its history. It acquired NeXT Computer in 1996, Beats
Electronics in 2014, Shazam in 2017, and Texture in 2018, just to name a few. The company's
drive towards innovation is bolstered by its ability to invest in companies like these that have
greatly improved its catalog of technologies.
1.3 Mission Statement
Apple's Mission Statement is “To design, develop, and market consumer
electronics, computer software, and personal computers.”
According to Reddy (2022), the Apple Mission Statement underscores Apple’s
commitment to providing the best products and services to meet each customer's unique
needs. It guides the company in pursuing its long-term goals, contributing to its success.
Apple’s mission statement consists of three components:
1) Best User Experience
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Whether it is an iPhone, iPad, or wearable, Apple designs all its products to be
user-friendly. The company does not compromise when it comes to user experience.
Apple’s products are packed with innovative and user-friendly features that provide the
best experience to the end user. In 2020, Apple introduced robust location and
Bluetooth permissions in iOS 13. In 2021, iOS 14 introduced an opt-in feature for ad
tracking and iOS 16 in 2022.These user-friendly privacy features can help protect
iPhone users’ data and improve their experience.
2) Innovative Products
Apple develops products that are tailored to the specific needs of its customers.
Since the company's founding, Apple has continued to redefine the standard for
product design, usability, and functionality. Apple’s hardware and software solutions
address various market segments, including education, business, and healthcare. In
recent years, Apple has increased its presence in healthcare with innovative products
such as the Apple Watch for detecting heart irregularities. The Apple Health Records
feature for the iPhone allows patients to access their medical records through their
mobile devices. In 2020, Apple reported quarterly revenue of $91.8 billion, with record
sales of its healthcare products and services.
3) High-quality Services
From the App Store to Apple Care to tech support, Apple is obsessed with
customer service. The company handles everything from design to development to
sales to repair. This hands-on approach gives Apple an edge over its competitors. In a
2020 survey, Apple is rated 51/60 for online support and 34/40 for phone support, for
an overall tech support score of 85/100. This score is impressive, considering that most
companies provide poor customer service. This is one of the essential factors in Apple's
Mission Statement.
1.4 Vision Statement
Apple’s Vision Statement is “Apple is committed to bringing the best personal
computing experience to students, educators, creative professionals and consumers
around the world through its innovative hardware, software and Internet offerings.”
The company's operations, strategic planning, and decision-making are all governed
by Apple's vision. It guarantees that every choice brings the business closer to realizing its
objectives. The statement has two parts: Apple's vision directs the company's operations,
strategic planning, and decision-making. It ensures that every choice brings the business closer
to realizing its objectives. (Reddy, 2022). The statement has two components:
1) Leading in Product Design
Apple brings high-quality products to market, from iPhones, iPads, iPods,
Macs, microchips, and more. By encouraging innovation, the corporation aims to keep
up its position as a product design and development pioneer. Apple introduced a new
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iPad Pro in April 2021 with a market-leading M1 processor and super-fast 5G. The iPad
Pro is now the quickest device thanks to Apple's patented M1 and M2 French fries,
which push the performance envelope. The 5G capability of the new iPad Pro can
reach up to 4 Gbps. The future is 5G. Therefore, Apple can be sure that this new iPad
will remain the market leader for many years.
2) Carbon Neutral
Across all of its companies, Apple has established a target to have a net carbon
footprint of zero. The business outlined a target in 2020 to have all Apple products
carbon neutral by 2030. In its 2020 Environmental Progress Report, Apple intends to
cut its emissions by 75% by 2030 and find creative ways to eliminate the remaining
25% of CO2 emissions. Apple CEO Tim Cook stated, “We hope that by committing to
carbon neutrality, we may be a modest ripple in the pond that makes a much more
significant difference.”
1.5 Core Values
Apple's principles guide the company's and its workers' actions and interactions in the
workplace and with others.
1) Accessibility
Apple provides enterprises and customers with the hardware, software,
services, and technology required to fulfill their ambitions. To create applications,
developers rely on the ecosystem of Apple's App Store. Apple lowered the App Store
commission for small businesses to 15% in 2020. Because of the program's lower
commission, small developers now have access to the App Store and more money to
reinvest and expand their companies (Press Release, 2020).
2) Supports Education
According to (Apple Inc., 2020). The Cupertino-based digital behemoth
provides goods, assistance, and opportunities to needy schools. Apple has supported
the connectED project since 2014 and has given over 100 underfunded American
schools over $100 million worth of teaching and learning resources. According to
Apple, every student has received an iPad, every instructor has received a Mac and
iPad, and every classroom has received an Apple TV.
3) A Planet-sized Plan
By 2030, all of Apple's goods will have no carbon footprint and be made with
sustainable energy. The company is now carbon neutral. Apple unveiled the
Restoration Fund in 2021, a ground-breaking program to reduce carbon emissions. In
order to remove around 1 million metric tons of CO2 from the atmosphere per year, it
will invest $200 million in forestry projects. This project expands on Apple's continuing
conservation efforts in the forestry sector, including cooperation with NGOs in
Colombia to restore a 27,000-acre mangrove forest (Press Release, 2021).
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4) Apple is All In
According to Nellis (2021), Apple has redoubled its dedication to advancing
global justice and fostering a more inclusive workplace. Antonio Garca Martinez, one
of Apple's ad managers, was fired in May 2021 after more than 2,000 Apple employees
signed an internal petition condemning misogyny and bigotry in response to his 2016
book "Chaos Monkeys," which promoted such beliefs. In the workplace, Apple supports
diversity and inclusion. “Behavior that demeans or discriminates against people for who
they are has no place here,” said Apple.
5) Privacy is a Human Right
According to Dang (2021), Apple creates its products with consumers' privacy
and information control in mind. The business considers privacy to be a fundamental
human right. Apple released an upgrade to iOS in April 2021 that added new privacy
measures to stop internet marketers from tracking iPhone users. Certain apps will
display a pop-up notification asking users of Apple's more than 1 billion iPhones for
permission to collect data. This feature ensures that unaffiliated apps and websites
cannot use consumers' data to monitor them online.
6) Racial Equity and Justice
According to Leswing (2021), Apple recognizes its duty in the global battle
against systemic racism and inequality as a leader in technology. Via the Racial
Equality and Justice Initiative (REJI), the firm pledged $100 million to help communities
of color overcome racism. Since Parler's users might spread hate and organize the
January 6th storming of the US Congress, Apple blocked Parler from its app store.
Apple reactivated Parler in the app store in April 2021 after introducing new upgrades
to identify illegal content and hate speech.
7) Supplier Responsibility
Apple's suppliers demand the highest labor, human rights, health and safety,
and environmental standards. The business has a strict process for evaluating the
performance of its suppliers in order to achieve this. In 2019, Apple conducted 80
examinations at manufacturing facilities, 50 in the services supply chain, and 291
evaluations at smelting sites and refineries (Apple, Inc., n.d).
1.6 Goals and Objectives of the Company
According to www.studycorgi.com (2023), Apple is committed to providing students,
teachers, workers, and other consumers with the best computer experience through its
innovative hardware, software, and networked applications. The statement covers the
company’s product segments and demonstrates Apple’s broad customer focus. Apple makes
Mac laptops and delivers high-quality personal computers such as OSX, iLife, iWork, and other
software. Apple also dominates digital sales with its iPods and the most well-known online store
iTunes (Zhang, 2018). By showing people the world of mobile phones from a different
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perspective through the iPhone and the App Store, Apple also created the iPad, thereby
becoming the corporation that currently shapes the future of mobile media and digital
technology.
Mac laptops and iPhones are some of the most extensive business domains. At the
moment, there is a sharp surge in increased demand and supply in the technology market.
Brand-new companies are willing to offer models at a much lower price, albeit lower quality.
People with limited financial resources may prefer a competitor's brand. It has long been one
of the main challenges; however, the company is well addressing this complication with a clear
business strategy focused on developing strong branding, innovation process, and quality
improvement. The company is also constantly working on ensuring a sufficient marketing
presence and profitability of product sales. Apple is developing new concepts for the connection
to the users for a better perception of the level of satisfaction with products (Podolny & Hansen,
2020). It helps analyze the consumer market and make it more segmented and efficient for the
well-defined long-term strategy to carry the organization another three- or five-year period.
Apple’s corporate governance strategy is focused mainly on sustainability and
profitability. The company focuses on improving trading and production activities and improving
innovative technical resolutions to accomplish this objective. The business is currently
expanding and already has many vertical business lines. Apple creates premium products by
tightly controlling the supply chain and setting precise requirements for the few suppliers and
investors included in the process. It generates a high level of independence from all additional
risks of diversification, outsourcing, and integration. All hardware and software products work
because they are designed precisely for each other. The company has followed this strategy
from the beginning and has proven its effectiveness showing a massive brand influence and
the highest revenue (Zhang, 2018). Further work of the company on product innovation will
continue to capture the market for at least the next decade due to its overall impact and distinct
branding.
CHAPTER II
ANALYSIS OF THE MACRO-ENVIRONMENT
2.1 PEST Analysis
PEST analysis is a strategic management tool used to analyze and evaluate the
external macro-environmental factors that can impact a business. The acronym PEST stands
for Political, Economic, Sociocultural, and Technological factors. PEST analysis helps
businesses understand the critical external factors affecting their operations and make informed
decisions to minimize risks and leverage opportunities.
2.1.1 Political Forces
Apple Inc. faces potential risks from political events, trade and other international
disputes, war, terrorism, natural disasters, public health issues, industrial accidents, and other
business interruptions. The company's business can be impacted by trade policies, sanctions,
and other measures that restrict international trade, which can materially adversely affect the
company's business, mainly if these measures occur in regions where the company derives a
significant portion of its revenues and/or has significant supply chain operations. The
company's operations and facilities, along with the vital business operations of its suppliers and
contract manufacturers, are located in regions that are susceptible to earthquakes and other
natural disasters, terrorist attacks and other hostile acts, ransomware and other cybersecurity
attacks, labor disputes, public health issues, and other unpredictable events. The company
relies on single-source outsourcing partners to supply and manufacture various components
and on outsourcing partners primarily situated in Asia for the final assembly of nearly all of the
company's hardware products. The company is exposed to increased regulation, governmental
investigations, legal actions, and penalties since the technology sector, including the
corporation, is sometimes under intensive media, political, and regulatory attention. Lastly,
changes in liquidity, credit deterioration, financial outcomes, market and economic conditions,
political risk, sovereign risk, interest rate variations, or other variables may adversely affect the
company's investments. Aforementioned information is based on Apple Inc.'s 2020 annual
report (Form 10-K) submitted to the American Securities and Exchange Commission. On
October 30, 2020, the Securities and Exchange Commission (SEC).
2.1.2 Economic Forces
Apple Inc. is exposed to several macroeconomic and sectoral risks that could materially
affect its operations and bottom line. The following risks have been identified based on Apple
Inc.'s 2020 annual report (Form 10-K) submitted to the US. On October 30, 2020, by the
Securities and Exchange Commission (SEC), and includes:
1) Global and Regional Economic Conditions
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Adverse macroeconomic conditions can harm consumer confidence and
spending and materially affect the company's goods and services demand. These
conditions include inflation, slower growth or recession, new or increased tariffs, fiscal
and monetary policy changes, tighter credit, higher interest rates, high unemployment,
and currency fluctuations.
2) Dependence on International Operations
Given that the business has operations abroad and a significant portion of its
total net sales is generated outside of the United States, its operations and
performance are highly dependent on regional and global economic conditions. The
company's global supply chain is extensive and intricate, and the bulk of its supplier
locations, including production and assembly sites, are outside of the United States.
3) Dependence on Outsourcing Partners
The firm relies on single-source outsourcing partners in the U.S., Asia, and
Europe to supply and produce various components. For the final assembly of most of
its hardware products, the company relies on outsourcing partners based in Asia.
Failure of these partners to deliver could harm the cost or supply of components or
finished goods for the business.
Manufacturing or logistics in these locations and transit to final destinations
may be disrupted for various reasons, including natural or artificial disasters, IT system
failures,
commercial
disputes,
armed
conflict,
economic,
business,
labor,
environmental, public health, or political issues.
4) Credit and Collectability Risk
Increased credit and collectability risk on the company's trade receivables, the
failure of derivative counterparties and other financial institutions, restrictions on the
company's ability to issue new debt, decreased liquidity, and drops in the fair value of
the company's financial instruments are all possible effects of a downturn in the
economy. These and other economic factors can significantly harm a company's
operations, financial situation, and stock price.
2.1.3 Social Forces
The macro-environment report for Apple Inc. highlights potential risks and uncertainties
related to social forces. Social forces are external factors that shape individuals' and groups'
attitudes, beliefs, values, and behaviors. These forces significantly impact the success and
sustainability of any business, and companies must be aware of the evolving social trends and
expectations to remain competitive.
Apple Inc. is exposed to potential liabilities, increased costs, and reputational harm
related to environmental, social, and governance (ESG) considerations. Many stakeholders,
including customers, employees, investors, and regulators, are increasingly focused on ESG
issues such as climate change, human rights, diversity, equity, and inclusion. The company's
10
response to these social forces involves risks and uncertainties and requires significant
investments.
Apple Inc. has set ESG goals and initiatives and makes public statements about its
progress. However, failure to achieve these goals or comply with ESG laws and regulations
could result in legal and regulatory proceedings, negatively impacting the company's reputation,
financial condition, and stock price. Moreover, the COVID-19 pandemic has highlighted the
importance of social factors such as health and safety, remote work, and social distancing. As
a result, companies like Apple Inc. must adapt their operations and offerings to meet
consumers' changing social expectations and behaviors.
In conclusion, social forces significantly impact the success and sustainability of
businesses, and companies must be aware of the evolving social trends and expectations to
remain competitive. For Apple Inc., responding to ESG considerations involves risks and
uncertainties, requiring significant investments and reliance on third-party data. Failure to meet
evolving stakeholder expectations and standards could result in legal and regulatory
proceedings and negatively impact the company's reputation and financial condition.
Aforementioned information is taken from Apple Inc.'s 2020 annual report (Form 10-K)
submitted to the U.S. On October 30, 2020, the Securities and Exchange Commission (SEC).
2.1.4 Technological Forces
Apple Inc. faces several risks in its business operations and market competition. The
highly competitive markets for Apple's goods and services are marked by aggressive price
competition, which puts pressure on gross margins, the regular introduction of new goods and
services, the rapid adoption of new technologies by rivals, the short product life cycles,
changing industry standards, and price sensitivity on the part of customers and businesses.
Apple’s competitors imitate its products and infringe on its intellectual property.
The Company relies on access to third-party intellectual property, which may not be
available on commercially reasonable terms or at all. Apple’s products and services include
intellectual property owned by third parties, which requires licenses. The company’s ability to
compete depends heavily on ensuring the continuing and timely introduction of innovative new
products, services, and technologies to the marketplace. The company must make significant
investments in research and development. There can be no assurance that these investments
will achieve the expected returns, and the company may not be able to develop and market
new products and services successfully.
The company’s success also depends on the continued availability and development
of compelling and innovative product software applications. The company may order
components for its products and build inventory before product announcements and shipments,
risking incorrect forecasting and production of excess or insufficient components or products.
Some third-party digital content providers require the company to provide digital rights
management and other security solutions, which can affect the company's costs.
11
Apple’s business and reputation can be impacted by the information technology system
failures and network disruptions, which can adversely affect the company’s business by, among
other things, preventing access to the company’s online services, interfering with customer
transactions, or impeding the manufacturing process. Finally, much of the company’s future
success depends on the talents and efforts of its team members and the continued availability
and service of key personnel, including its Chief Executive Officer, executive team, and other
highly skilled employees. Aforementioned information is based on Apple Inc.'s 2020 annual
report (Form 10-K) filed with the U.S. Securities and Exchange Commission (SEC) on October
30, 2020.
2.2 Competitive Forces
2.2.1 Porter's Five Forces
Porter's Five Forces model explains how competing forces shape each industry. These
influences might reveal the industry's strengths and weaknesses. Hence, according to Porter's
five forces study, an industry's competitive landscape is established by combining five elements
(David, 2011).
Since it was founded in 1976, Apple Inc. has grown to be one of the most valuable
companies in the world because it dominates the technology market. In 2018, Apple had a
market capitalization of more than a trillion dollars. This was made possible by the company's
constant focus on innovation, marketing, and building brand loyalty. Porter's Five Forces
analysis may explain how Apple has maintained on top of the technology market despite
increased rivalry from Google, Amazon, Microsoft, Lenovo, Samsung, and many more.
Figure 2.1 Porter’s Five Forces of Apple Inc.
12
1) Intense Rivalry Among Competitors
Tech market giants like Samsung, Google, and Amazon compete with Apple
in the invention, product development, and marketing. Apple and its competitors'
products are similar hence, serve the same market niche.
Technology's low switching costs boost competition. The client spends little
effort or money switching from Apple to another brand. If an Android app is popular, it
may be released for iOS (Apple). iCloud on Apple's iPhone and Google Drive on
Google's Android devices are two further examples of cloud-based data storage from
separate manufacturers. Apple has continually differentiated its product to improve and
preserve its market position, considering these competitors in its strategic planning.
Apple's rivals have demonstrated the capacity to create products and services
similar to Apple's, which poses a challenge to Apple. Nonetheless, the intense
competition within the industry gives Apple an advantage, allowing them to improve
continuously.
2) Threats of New Competitors
The technology industry is known for being highly competitive and constantly
evolving, with new technologies and products emerging all the time. However, the
threat of new entrants into the industry is relatively low due to the significant barriers to
entry.
One of the primary barriers to entry is the high cost of research and
development required to create innovative products that can compete with established
brands like Apple. Additionally, strong brand loyalty to Apple and the economies of
scale that come with a large customer base makes it difficult for new entrants to gain a
foothold in the market.
While established competitors like Google and Amazon have significant
financial resources and investment capabilities to compete with Apple head-on, new
entrants face substantial expenses associated with creating a new brand and building
a customer base. This makes it difficult for them to compete effectively against
established players like Apple.
Apple has a strong reputation for innovation and design, which further adds to
the difficulty for new competitors to enter and gain market share. In order to maintain
its competitive position, Apple must continue to invest in research and development to
create new and innovative products that meet the evolving needs of consumers.
Additionally, it must grow its customer base by building strong relationships with its
existing customers and attracting new ones.
3) Threats of Substitute Products or Services
In the context of Porter's Five Forces Model, substitute items are alternatives
to a company's products rather than ones that directly compete with them (Maverick,
2022). In the case of Apple, an example of a substitute product is a DSLR camera that
might be a substitute for owning an iPhone. DSLR cameras have been around for a
13
long time, and many professional photographers still prefer them. It has advantages
over smartphone cameras, such as better image quality, more control over exposure
and focus, and the ability to use interchangeable lenses. However, DSLR cameras are
much bulkier and heavier than an iPhone. It's more portable than a smartphone and
won't fit in a pants pocket. Plus, if you have more than one, you'll probably need a bag
to hold additional accessories and lenses. Needing to lug about heavier loads because
of necessary add-ons is a common problem. Also, if you want to get the most out of
the camera, it requires some knowledge and expertise.
On the other hand, Apple's iPhone has much more capabilities than a DSLR
camera. Like with other smartphones that run an operating system, the iPhone can do
most of what a computer can, and it does not limit only to taking pictures and videos.
Also, most people always have iPhones with them, making it easy to take photos and
videos. This is much easier than using a DSLR camera, which takes more time to set
up. Moreover, the iPhone's user interface is designed to be intuitive and user-friendly,
making it easy for anyone to take great photos and videos without having to spend time
learning complicated camera settings. In addition, the iPhone allows you to instantly
edit and share your photos and videos, making it easy to post them to social media or
share them with friends and family. Furthermore, when it comes to cost, DSLR cameras
can be expensive, especially when you factor in the price of lenses and other
accessories. The iPhone, on the other hand, is a much more affordable option that still
delivers high-quality results.
Despite the presence of substitutes, the iPhone remains a popular choice
among consumers due to its versatility and accessibility. Hence, substitutes for Apple's
products pose little threat because of their limited capabilities and are not a significant
factor for Apple.
4) Bargaining Power of Buyers
Apple's customers have high bargaining power due to the abundance of
competing products available in the market, and customers have many options to
choose from. This situation limits Apple's pricing power and forces the company to offer
competitive prices and better product features to attract and retain customers.
Customers also have access to vast amounts of information about products, including
descriptions, customer reviews, and expert opinions, which help them make informed
decisions.
However, Apple has addressed this challenge by investing heavily in research
and development, which has led to the introduction of exclusive products like AirPods
and the Apple Watch. These products have increased brand loyalty and attracted new
customers, thereby reducing the bargaining power of customers. Additionally, Apple
has created a unique ecosystem of hardware, software, and services, making it difficult
for customers to switch to other brands. For example, once a user has invested in the
14
Apple ecosystem by purchasing an iPhone, it becomes challenging to switch to an
Android device because they lose access to Apple's exclusive apps and services.
In summary, although customers have high bargaining power due to the
abundance of competing products and access to information, Apple has been able to
mitigate this through innovation, brand loyalty, and a unique ecosystem of hardware,
software, and services.
5) Bargaining Power of Suppliers
As one of the world's largest technology companies, Apple has significant
bargaining power over its suppliers. Apple's brand reputation and global reach allow it
to command a dominant position in the supply chain, providing significant benefits to
suppliers who became a part of Apple's network.
Suppliers are highly dependent on Apple for a significant portion of their
revenue, which gives Apple significant leverage to negotiate better prices and terms.
Apple can use its bargaining power to negotiate favorable prices, payment terms, and
delivery schedules with its suppliers. This allows Apple to keep its costs low and
increase its profit margins.
Apple also uses its bargaining power to maintain control over the quality of its
products. The company requires its suppliers to adhere to strict quality standards and
undergo regular audits to ensure compliance. This helps Apple maintain its brand
reputation for high-quality products.
In addition, Apple's large-scale operations provide significant benefits to its
suppliers. Apple's volume of orders provides economies of scale for suppliers, which
can reduce their costs and increase their profitability. Being part of Apple's supply chain
can also provide suppliers with access to new markets and customers.
In summary, Apple's significant bargaining power over its suppliers allows the
company to negotiate favorable prices and terms while maintaining control over product
quality. This, in turn, helps Apple maintain its brand reputation for high-quality products
while keeping its costs low and its profit margins high.
Overall, Apple has a solid competitive position in the smartphone industry due to its
brand reputation, innovation, and scale of operations. However, it faces intense competition
and must continue to innovate and differentiate its products to maintain its market share.
2.3 Identification of The Industry And The Competitors
2.3.1 Competitive Profile Matrix
The Competitive Profile Matrix (CPM) evaluates a firm's primary competitors and
strengths and weaknesses relative to a sample firm's strategic stance. The results of this
comparison provide strategic internal information. Internal and external aspects might affect a
CPM's crucial success; as a result, the ratings reflect both strengths and weaknesses, where 4
15
= major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness (David,
2011).
The critical success factors used in Apple's CPM are chosen based on the critical
factors for success in the technology industry. In light of this, the selected criteria factors are
based on several CPM in the technology industry from prior case studies found on the internet.
According to Denis G (2022), most of the factors are fundamental critical success factors, such
as Marketing Strategy, Product Quality, Innovation, Price Competitiveness, Product Variation,
and Customer Loyalty are considered critical success factors because they are vital areas
where companies in the technology industry compete. These factors are closely related to a
company's ability to attract and retain customers, generate revenue, and maintain profitability.
On the other hand, Global Expansion, Store Location, and Market Share are also important
factors. However, they are given less weight compared to the other six factors because they
are more related to a company's ability to expand its reach and market presence, rather than
its ability to compete on product quality, innovation, or customer loyalty.
Table 2.1 Competitive Profile Matrix
CPM
Critical Success Factor
APPLE
Weight
Rating
Marketing Strategy
0.12
4
Product Quality
0.12
Innovation
Score
SAMSUNG
MICROSOFT
Rating
Score
Rating
Score
0.48
4
0.48
4
0.48
4
0.48
4
0.48
4
0.48
0.12
4
0.48
3
0.36
3
0.36
Price Competitiveness
0.12
1
0.12
3
0.36
3
0.36
Product Variation
0.12
3
0.36
4
0.48
4
0.48
Customer Loyalty
0.12
4
0.48
3
0.36
2
0.24
Global Expansion
0.10
3
0.30
4
0.40
4
0.40
Store Location
0.10
4
0.40
2
0.20
2
0.20
Market Share
0.10
4
0.40
3
0.3
2
0.20
TOTAL
1.00
3.50
3.42
3.20
The CPM illustrated how Apple Inc. compares with its tight competitors, Microsoft and
Samsung. As we can see, Apple garnered the highest weighted score of 3.50, while Samsung
16
positions itself in second place with a 3.42 weighted score, followed by Microsoft with a
weighted score of 3.20.
A high weighted average in the CPM indicates that Apple is better positioned to
compete in the market than its competitors based on the critical success factors evaluated.
However, it is essential to note that the CPM is just one tool for evaluating competitive
positioning and does not guarantee success in the market. Apple's success in the market is
also dependent on other factors, such as the overall economic environment, changes in
consumer preferences, technological advancements, and the actions of its competitors.
Therefore, Apple must continue to innovate and differentiate its products to maintain its
competitive advantage in the market.
2.4 Organization’s Opportunities And Threats
2.4.1 Opportunities
1) Growing Demand for Wearables Technology and Accessories Products
The wearables market has been expanding quickly in recent years, and
between 2020 and 2027, a 15.5% CAGR is predicted. The rising demand for
smartwatches, fitness trackers, and other wearable technology fuels this. Due to the
popularity of its wearable devices, including the Apple Watch and AirPods, the business
has been enhancing its selection. According to a report by Counterpoint Research,
Apple's wearables market share was 28% in Q3 2021, and the company's wearables
revenue grew by 25% year-over-year in Q4 2021. The increasing demand for
wearables presents an opportunity for Apple to expand its product line and increase its
revenue (Kulesh, 2021).
2) Growing Popularity of the App Store and Digital Services also Expands into Emerging
Markets
The App Store is a significant source of revenue for Apple, generating over
$64 billion in 2020. The popularity of the App Store is driven by the increasing number
of smartphone users and the growing demand for mobile applications. Apple has been
expanding its digital services, such as Apple Music, Apple TV+, and Apple Arcade, and
these services have been successful. The company has also been expanding into
emerging markets, such as India and Brazil, with a growing demand for digital services.
This expansion presents an opportunity for Apple to increase its revenue and market
share in these markets.
3) Increased Demand for Streaming Services with High Growth Potential
The demand for streaming services has been increasing rapidly in recent
years, with the global streaming market expected to grow at a CAGR of 21% between
2021 and 2028(Favale, Soro, Trevisan, Drago, & Mellia, 2020). Apple has been
expanding its streaming services, such as Apple TV+, which launched in 2019. The
company has also invested in original content to compete with other streaming
17
services, such as Netflix and Amazon Prime Video. The increasing demand for
streaming services presents an opportunity for Apple to increase its revenue and
market share in this area.
4) Growing Demand for Online Education
The COVID-19 pandemic has accelerated the demand for online education,
which is expected to continue. According to a report by www.sciencedirect.com (2020),
the global e-learning market is expected to grow at a CAGR of 15.4% between 2021
and 2028. Apple has invested in education technology, such as the iPad and Apple
Pencil. It has also expanded its educational offerings, such as Apple Teacher and the
Everyone Can Code program. The growing demand for online education presents an
opportunity for Apple to increase its revenue and market share in this area.
5) Increased Demand for Remote Work Solutions and Electric Vehicles
The COVID-19 epidemic has also increased the tendency toward remote work,
and this trend is anticipated to persist even after the pandemic has ended. Apple has
been investing in remote work solutions, such as the iPad and MacBook, and
expanding its offerings, such as the Apple Business Manager and Apple School
Manager. Additionally, Apple has been rumored to be working on an electric vehicle,
which presents an opportunity for the company to enter a new market and diversify its
revenue streams.
2.4.2 Threats
1) Intense Competition in the Smartphone Market
The COVID-19 pandemic has also accelerated the remote work trend, which
is expected to continue even after the pandemic. Apple has been investing in remote
work solutions, such as the iPad and MacBook, and expanding its offerings, such as
the Apple Business Manager and Apple School Manager. Additionally, Apple has been
rumored to be working on an electric vehicle, which presents an opportunity for the
company to enter a new market and diversify its revenue streams. The intense
competition in the smartphone market threatens Apple's revenue and market share.
2) Supply Chain Disruptions
Apple relies heavily on third-party suppliers and manufacturers for the
components and assembly of its products. The company has faced supply chain
disruptions, such as the COVID-19 pandemic and Japan's 2011 earthquake and
tsunami. These disruptions can impact Apple's production and revenue. Additionally,
Apple has faced criticism for its labor practices and working conditions in its supply
chain, which can damage its reputation and brand image.
3) Regulatory Risks
It is changing regulations and legal issues. Apple operates in a highly
regulated industry and is subject to various regulations and legal issues. For
example, the company has faced antitrust investigations in the US and Europe over
18
its App Store practices. Additionally, Apple has faced criticism for its privacy practices
and has been accused of not doing enough to protect user data. Changes in
regulations or legal issues can impact Apple's operations and revenue.
4) Fluctuating Foreign Exchange Rates and Economic Uncertainties
Apple operates in a global market and is subject to fluctuations in foreign
exchange rates and economic uncertainties. Changes in exchange rates can impact
Apple's revenue and profitability. Economic uncertainties, such as the COVID-19
pandemic or geopolitical tensions, can also impact consumer demand and Apple's
operations.
5) Cybersecurity Threats
Apple's products and services are subject to cybersecurity threats like hacking
and data breaches. These threats can damage Apple's reputation, harm its users, and
impact its revenue. Apple has invested in cybersecurity measures, such as encryption
and biometric authentication, to protect its users and products. However, the increasing
sophistication of cybersecurity presents an ongoing threat to the company.
2.4.3 External Factor Evaluation (EFE) Matrix
EFE Matrix stands for External Factor Evaluation Matrix, which is a strategic
management tool used to assess the external environment of a company. The matrix
summarizes the opportunities and threats of a company's external environment and ranks them
based on the significance and potential impact on the company's strategic goals and objectives.
Table 2.2 External Factor Evaluation Matrix
Factors
Weight
Rating
Weighted
Score
OPPORTUNITIES
O1
Growing
demand
for
wearables
technology and accessories products
0.15
4
0.60
O2
Growing popularity of the App Store and
digital services also expansion into
emerging markets
0.09
4
0.36
O3
Increased demand for streaming
services with high growth potential
0.10
4
0.40
O4
Growing demand for online education
0.08
3
0.24
O5
Increased demand for remote work
solutions and electric vehicles
0.09
3
0.27
19
THREATS
T1
Intense competition in the smartphone
market
0.15
2
0.30
T2
Supply chain disruptions
0.09
2
0.18
T3
Regulatory risks
0.08
3
0.24
T4
Fluctuating foreign exchange rates and
economic uncertainties
0.09
3
0.27
T5
Cybersecurity threats
0.08
2
0.16
TOTAL
1.00
3.02
Legend: Major weakness (rating = 1), Minor weakness (rating = 2), Minor strength (rating = 3),
Major strength (rating = 4)
Table 2.1 is an External Factor Evaluation Matrix (EFE Matrix) that assesses a
company's opportunities and threats in its external environment. The matrix contains five
opportunities and five threats, each with a weight, rating, and weighted score. The total weight
is 1, and the total weighted score is 3.02. The highest weighted scores for opportunities is the
growing demand for wearables technology and accessories products. The highest weighted
scores for threats is the intense competition in the smartphone market. The company may need
to focus on mitigating the impact of these threats while leveraging the opportunities to gain a
competitive advantage in the market.
In Table 2.1, five opportunities and five threats are identified for the company. The weights
assigned to each factor reflect their relative importance to the company's success. The ratings
assigned to each factor reflect the company's current position or potential in each area, with 1
being the lowest and 4 being the highest.
The opportunities identified in the table include:
1) Growing demand for wearables technology and accessories products,
2) Growing popularity of the App Store and digital services and expansion into
emerging markets,
3) Increased demand for streaming services with high growth potential,
4) Growing demand for online education, and
5) Increased demand for remote work solutions and electric vehicles.
20
These opportunities are weighted based on their potential impact on the company's
success. For example, the weight assigned to the growing demand for wearables technology
and accessories products is 0.15., which indicates that it is moderately essential to the
company's success. The rating assigned to this factor is 4, which indicates that the company is
in a solid position to take advantage of this opportunity.
The threats identified in the table include intense competition in the smartphone market,
dependence on third-party suppliers and manufacturers, regulatory risks, fluctuating foreign
exchange rates and economic uncertainties, and cybersecurity threats. These threats are
weighted based on their potential impact on the company's success. For example, the weight
assigned to regulatory risks is 0.08, which indicates that it is moderately essential to the
company's success. The rating assigned to this factor is 3, which indicates that the company is
in an average position to deal with regulatory risks.
It is important to note that the weights and ratings assigned to each factor are subjective
and may vary depending on the company and its specific situation. Therefore, the EFE Matrix
should be used as a guide for strategic decision-making rather than an absolute measure of
success.
The EFE Matrix can help a company identify critical external factors impacting its
success and develop strategies to leverage opportunities and mitigate threats. This tool allows
companies to make informed decisions about their future direction and position themselves for
success in a competitive market.
CHAPTER III
COMPANY ANALYSIS
3.1 Company Profile
3.1.1 Product
Popular Apple products include the iPhone, iPad, Mac computer, Macbook, and
wearable tech such as the Apple Watch and AirPods. It also includes smart home products and
service products. There is no part of daily living in which Apple products don’t play a part. The
table shown below illustrates the products that are available for purchase in Apple Inc. including
its picture for reference and description.
Table 3.1 Apple Products
PRODUCT
iPhone
PICTURE
DESCRIPTION
iPhone is the company’s line of
smartphones based on its iOS
operating system.
Mac and Macbook
Mac is the company’s line of
computers based on its macOS
operating system. The Mac line
includes laptops MacBook Air and
MacBook Pro, as well as desktops
iMac, Mac mini, Mac Studio and
Mac Pro.
22
iPad
iPad is the company’s line of
multipurpose tablets based on its
iPad OS operating system.
Wearables, Home
and Accessories
(AirPods, AirPods
Max, Apple TV+,
and Apple Watch)
Wearables,
Home
and
Accessories includes, AirPods, the
Company’s wireless headphones,
including AirPods, AirPods Pro
and AirPods Max. Apple TV, the
Company’s media streaming and
gaming device based on its tvOS
operating system, including Apple
TV 4K and Apple TV HD. Apple
Watch, the Company’s line of
smartwatches
watchOS
based
operating
on
its
system,
including Apple Watch Ultra, Apple
Watch Series 8 and Apple Watch
SE, and Beats products, HomePod
mini and accessories.
23
AppleCare
Under the AppleCare brand, the
company provides a portfolio of
fee-based service and support
products, such as Apple technical
support, and additional coverage
for
instances
of
accidental
damage, theft, and loss.
iCloud
The cloud service provided by the
company
to
store
and
keep
customers' content up to date and
accessible across multiple Apple
devices and Windows personal
computers.
Digital Content
(App Store and
Apple Music)
The company operates several
platforms, including the App Store,
that allow customers to discover
and download applications and
digital content such as books,
music,
videos,
games,
and
podcasts.
Apple also provides digital content
through
subscription-based
services such as Apple Arcade, a
game subscription service; Apple
Music, which provides users with a
curated
listening
experience;
Apple News+, a subscription news
and magazine service; and Apple
TV+, which provides exclusive
original content and live sports.
24
Payment Services
(Apple Card and
Apple Pay)
The Company provides payment
services such as Apple Card, a cobranded credit card, and Apple
Pay, a cashless payment service.
3.1.2 Capacity
Capacity refers to a company's workforce, customers, suppliers, and product variety.
Currently, the company employs over 165,000 people worldwide in retail, technology, non-tech,
and leadership roles. Apple reported an all-time high revenue of $111.4 billion on December
26, 2020, representing a 21% year-over-year increase (Apple, 2021). There are currently more
than 1.65 billion Apple devices in use worldwide (www.beebom.com, 2022). Again, Apple is
one of the most valuable companies in the United States, with a market capitalization of more
than $2.75 trillion as of March 2022. Its ability to be a true innovator in personal technology has
contributed significantly to its success. Apple, however, does not rely solely on its own
manufacturing to achieve such greatness. It works with over 200 suppliers to obtain
components for assembly. Apple puts a lot of effort into monitoring its suppliers, relationships
that help the tech behemoth manage one of the most efficient supply-chain management
systems on the market at the moment. Finally, Apple's focus on meeting the needs of its
customers places it ahead of its competitors in capacity management. This process enables
them to forecast expected trends, allowing them to maintain high liquidity even during economic
challenges such as the 2008/2009 financial crisis.
3.1.3 People
Apple believes it has a talented, motivated, and dedicated team and strives to create a
welcoming, safe, and supportive environment for all of its employees. The company had
approximately 165,000 full-time equivalent employees as of September 24, 2022 (Apple, 2022).
Furthermore, the company remains committed to its vision of creating and sustaining a more
inclusive workforce that reflects the communities it serves. The company will continue to work
to increase diverse representation at all levels, foster an inclusive culture, and support equitable
pay and opportunities for all employees. Lastly, Apple believes that open and honest
communication among team members, managers, and leaders contributes to the creation of
an open, collaborative work environment in which everyone can contribute, grow, and succeed.
Team members are encouraged to approach their managers with any questions, comments, or
concerns, and the company conducts surveys to gauge employee sentiment in areas such as
career development, manager performance, and inclusivity.
25
3.1.4 Pricing
Apple CEO Tim Cook told Bloomberg Businessweek in 2013 that “We never had an
objective to sell a low-cost phone. Our primary objective is to sell a great phone and provide a
great experience, and we figured out a way to do it at a lower cost.”
Steve Jobs' original Apple strategy was founded on four principles:
1) Offer a small number of products
2) Focus on the high end
3) Give priority to profits over market share
4) Create a halo effect that makes people eager for new Apple products
Apple's pricing strategy is based on product differentiation, which aims to make
products unique and appealing to its customer base. Apple has been successful in
differentiating its products and thus, creating demand for them. This, combined with their brand
loyalty, gives the company negotiating power over pricing. The table below shows the various
products that Apple Inc. offers together with its range of prices.
Table 3.2 Apple Products’ Prices
PRODUCT
PRICE RANGE
iPhone
Php 30,990 - Php 109,990
Mac and Macbook
Php 36,990 - Php 359,990
iPad
Php 32,990 - Php 152,990
Wearables, Home and Accessories
(AirPods, Apple TV+, and Apple Watch)
Php 8,490 - Php 52,990
Apple Care
Php 2,000 - Php 4,690 (per month)
iCloud
Php 49 - Php 499 (per month)
Apple employs a retail strategy known as minimum advertised price or MAP. This
strategy prevents retailers from selling Apple products at prices lower than the MAP. Apple can
maintain product popularity by ensuring that the price of Apple products never falls below a
certain level. This allows Apple to keep its distribution channels clear while maintaining its
profits. This all contributes to Steve Jobs' original strategy of creating premier products that sell
for premium prices.
3.1.5 Buyers' and Consumers' Profile
Apple's target audience consists of middle- and upper-class users who are willing to
pay more for products that provide an exceptional user experience. Apple's target market
consists primarily of younger to middle-aged consumers, with females outnumbering males.
26
Although Apple's customer base is stronger in North America, the company is well-known
worldwide.
Apple customers are generally financially secure and do not take risks. They appreciate
the convenience of the Apple brand, as well as the quality and security it represents. 20% of
iPhone and iPad owners believe that switching ecosystems would be more difficult than
switching banks. They are also devoted: nearly 85% of iPhone owners intend to purchase
another one. As a result, iPhone sales have been steadily increasing. 44.6 million iPhones were
shipped worldwide in the first quarter of 2022 (Statista, 2023).
3.2 Operations Plan
Apple Inc.'s operations management (OM) entails using the OM's ten decisions to
ensure that all aspects of the business run smoothly (Rowland, 2019). The ten decisions in
operations management concern, among other things, product design, quality management,
process and capacity design, location strategy, and inventory management.
Apple Inc. has a dedicated team of senior managers, each of whom is in charge of
implementing measures to address the ten operational management decisions. This
operational efficiency translates into competitive advantages and capabilities that help achieve
strategic goals, ultimately leading to the achievement of Apple's corporate mission and vision
statements.
Figure 3.1 Apple’s Operating Process
1) Design of Goods and Services
Apple's product design processes are managed by a number of organizational
components and officials. For example, the development and production of Macs
27
requires a Senior Vice President of Mac Hardware Engineering and a Vice President
of Mac Software Engineering. The interaction system ensures that the outputs in this
operational area succeed in allowing Apple to excel in the design of its technological
products.
2) Quality Management
This operational management decision area focuses on quality standards and
controls. Apple Inc.'s Senior Vice President of Operations works with eight other Senior
Vice Presidents to ensure that the company's quality standards are met. The company
is known for having high quality standards that permeate all aspects of the business.
Thus, Apple takes a comprehensive approach to quality assurance in order to address
this decision area of operations management.
3) Process and Capacity Design
Support for maximizing workforce capacity for product development and
design is one of Apple's human resource management strategies. Furthermore, the
company collaborates with suppliers to ensure efficient processes and adequate
capacity in this area of operations management decision making. Furthermore, Apple
Inc. strives for facility innovation in order to maximize capacity and process efficiency.
As a result, the company has a comprehensive approach for this operational
management decision area.
4) Location Strategy
Apple Inc.'s location strategy is selective, involving limited seller authorization.
Currently, the company operates hundreds of stores in more than 20 countries. Despite
this limited approach to seller authorization, the company is now among the world's
most profitable.
5) Layout Design and Strategy
Apple’s layout design and strategy emphasize customer expectations. For
example, company-owned and authorized-seller stores are spacious with minimal
decor to ensure focus on Apple products. In the company’s other facilities, this decision
area of operations management is addressed through innovative office layouts that
encourage creativity and efficiency of workflows. Creativity is a critical factor among
employees involved in product design and development processes at Apple Inc.
6) Job Design and Human Resources
Apple's layout design and strategy place a strong emphasis on customer
expectations. Company-owned and authorized-seller stores, for example, are spacious
with minimal decor to ensure a focus on Apple products. This decision area of
operations management is addressed in the company's other facilities through
innovative office layouts that encourage creativity and efficiency of workflows.
Creativity is an important factor for Apple Inc. employees involved in product design
and development processes.
28
7) Supply Chain Management
Apple's supply chain is one of the world's most efficient and streamlined. To
address this decision area of operations management, the company employs process
automation and regular supplier monitoring. This monitoring assesses supplier
capacity and productivity, as well as adherence to the Apple Supplier Code of Conduct.
8) Inventory Management
Apple Inc. uses various methods of inventory management, such as the
serialized method, for effective product tracking and control in this decision area of
operations management. The company also employs the First In, First Out (FIFO)
principle. Apple Store managers are also in charge of inventory management in their
respective locations.
9) Scheduling
Apple Inc. uses a combination of automated and manual processes in this
decision area of operations management. Automation is used in the supply chain and
manufacturing processes to schedule activities. Manual scheduling, on the other hand,
is used in individual Apple Stores and in some aspects of the company's offices. In this
decision area of operations management, the firm's main goal is to maximize the
capacity utilization of facilities, equipment, and human resources.
10) Maintenance
Apple Inc. handles maintenance issues with dedicated maintenance teams.
For example, the company has separate maintenance teams for each of its facilities.
Apple's IT teams also serve as servers and other IT assets' maintenance teams. The
VP of Human Resources ensures that the company's personnel always have enough
capacity to perform well at the company's facilities.
3.3 Marketing Plan
Apple Inc. goes above and beyond what other brands do. The company concentrates
on developing products for their target audience and loyal customers who truly believe that the
company's products improve their lives (www.simplilearn.com, 2023). Apple’s marketing
strategy have consistently excelled as the best marketers over the past decade due to the
following marketing plan:
1) Focus on Finer User Experience
Apple's branding strategy is based on its stylish, more straightforward, and lush
products that focus on providing an easy-to-use and learn user interface. They are
lighter, easier to transport, and more durable. This minimalist design and user
experience make it an ideal sell to its target audience, which ranges from the middle to
upper classes.
29
2) Suave Yet Simple Advertising
Storytelling is an essential component of every Apple advertisement and
marketing campaign. These advertisements frequently emphasize minimal design and
high-quality images. They are usually combined with music or a simple story. Apple
makes a conscious effort to avoid using jargon or filler language in its advertising and
marketing. Instead, it shines a light on the product, allowing it to speak for itself without
revealing the price or using complicated words to describe its features.
3) Targeting the Right Markets
Apple is fantastic at tapping into its target audiences, much like a true tech
witch who understands their aspirations, preferences, and pain points. Its market
research is always on point, and its products, curation, and features are crystal clear.
Apple is one of the world's leading trillion-dollar brands. The key to Apple’s
success is its marketing strategy. It has always positioned itself in the premium market
and markets to high-end customers. Many brands are still perplexed as to how Apple
has such devoted customers which is its ingenious marketing strategies.
3.4 Summary of Strategies
Strategies are the methods through which a company intends to organize itself,
accomplish its short- and long-term objectives, and expand over time. The following are the
identified strategies currently utilized by Apple.
3.4.1 Integration Strategies
1) Forward Integration
To obtain control over its distribution channels, the corporation largely works
in the sector of forward vertical integration. For instance, Apple joined the retail sector
in 2001 when it launched its retail outlets. Another considered to be a form of vertical
integration in the field of distribution is Apple's online shop (Evans, 2021). Regarding
the advantages and disadvantages of Apple's strategy, it can be claimed that vertical
integration gives the corporation greater pricing freedom because of enhanced
scheduling and increased control over product distribution.
2) Backward Integration
Apple made use of PowerPC chips created by Motorola from the late 1990s to
the early 2000s. Midway through the 2000s, Intel chips were used because Intel chips
were the best on the market for personal computers at that time. For iPads, iPhones,
and Apple Watches, Apple started building its own A-series chips in 2010, and in 2020,
it converted the Mac computers' M-series circuits from Intel semiconductors to Appledesigned ones (Grothaus, 2021).
30
3) Horizontal Integration
Apple made a significant investment when it paid a substantial three billion
dollars to acquire Beats Music and Beats Electronics (Cattlin, 2021). Apple was able to
spot a business opportunity in the personal audio industry that it hadn't previously
explored with the acquisition of Beats.
3.4.2 Intensive Strategies
1) Market Penetration
To increase its market share, Apple concentrates on selling more of its items
in existing markets. Apple, for example, employs this aggressive strategy by pushing
sales of its iPhones in its present target regions, like the US. In order to implement this
approach, Apple expands the number of authorized sellers in its present markets.
In July 2020 Apple added Hodinkee to their reseller list for Apple Watch. The
company has covered Apple Watch design in their interviews with Jony Ive in the past
and it seems the company
is a good fit for selling the Watch itself
(www.appleInsider.com, 2021).
2) Market Development
The goal of market development is to sell current items in new markets. The
iPhone 11 was the most popular model of all smartphone brands sold in China in 2020.
After the US, China is Apple's second-largest market (Uta, 2021). Sales in China have
stagnated in recent years due to the emergence of fierce competition from Huawei and
Samsung. Through the company's third-party partners, Apple began to expand into a
new nation, India, which has demonstrated rising demand for Apple products.
3) Product Development
Apple has released new devices in each of its product lines every year. Apple
focuses on this strategy through innovation in its research and development
procedures. It specifies in its mission and vision statements that it views development
as one of the most crucial growth strategies. For instance, Apple continually makes
improvements to its iPad, Apple Watch, and iPhone models. When the original iPhone
was made available in 2007, it sold about 300,000 units in its first weekend. Apple has
since introduced 38 distinct iPhone models, the most recent of which is the iPhone 14
(Carey, 2023).
3.4.3 Diversification Strategies
1) Related Diversification
This is Apple’s step into the digital music player market. The Apple Music
software, which connects the iPod with the iMac and thus builds the strongest
connection between the two industries, highlights the iPod's obvious connections to
31
Apple's core business. The iPod digital music player serves as a platform for both of
these music and computer industries which make it a related diversification strategy.
Starting with 2001, Apple has developed innovative product lines like the iPod
(2001), the iPhone (2007), the iPad (2010), the AppleWatch (2015) and the smart
speaker HomePod (2018). These are on different product lines but they belong to the
same market: consumer electronics (Uta, 2021).
3.4.4 Defensive Strategies
1) Retrenchment
HomePod, an Apple smart speaker, was released in 2018, but its high price
put off consumers. The HomePod Mini, which was subsequently released in a smaller,
more affordable size, was the apex of the original HomePod's demise (Tamta, 2022).
The first smart speaker device from Apple, Original Homepod was ultimately
discontinued in 2021 when it was determined to be too pricey for the market. However,
Homepod mini was released at a lower price and has made a hit in the market
(Panzarino, 2021).
3.4.5 Differentiation
Apple has utilized the following differentiation strategies:
1) Different Operating Systems
Apple employs the Mac operating system for its MacBook computers rather
than the Windows operating system, like other computer makers. Because of this
operating system's elegance, high level of security, and reliability, many users have
grown to be loyal supporters of the brand. Apple also makes use of a distinct operating
system in the iOS-powered iPhone and iPad (Nguyen, 2022). Apple's smartphones and
tablets operate better than their Android rivals because of the iOS operating system's
capacity.
2) Product Pricing
Although Apple products cost more than those of their rivals on the
marketplace, customers are still willing to invest to buy products due to their highquality products and positive user experience (Nguyen, 2022).
3.5 Company’s Strengths and Weaknesses
3.5.1 Strengths
1) Greatest Major Brand
Interbrand, a management consulting group, has Apple in first place for the
eleventh year in a row, with a brand worth of $482.15 billion. Microsoft, placed at
number two with a brand worth of $278 billion, and Amazon, ranked third with a brand
value of $274 billion, were the next two brands (www.bstrategyhub.com, 2023).
32
2) Widely Recognized Corporation
When it comes to customized cutting-edge computers and smart technology
products, Apple is one of the most dependable companies. It has millions of consistent,
devoted clients (www.bstrategyhub.com, 2023). Apple's technological innovations
have brought about an age of devices that offer numerous cutting-edge designs that
have allowed them to grow internationally (Morgan & Nicole, 2021). The iPhone, iPad,
and MacIntosh computers are among the most well-known hardware items. Apple
shipped more than 81 million smartphones in the last quarter of 2021, a 70% increase
in smartphone shipment volume (Georgiv, 2023).
3) Brand of preference
Apple is an established brand in corporate settings, particularly among creative
workers. Apple provides top-notch technological solutions to meet the demands of
every business. For graphic arts, animation, video creation, and other creative tasks,
professionals demand high-performance equipment like Mac Pro or iMacs. According
to the report of the 2021 Fortune 500, Apple will be the third-most valuable brand in
2021 (Nguyen, 2022).
4) Thorough Research and Development
Apple devotes a lot of time to designing its products. To better understand
consumer wants and market trends, careful analysis and thorough research are
conducted. Apple keeps making large investments in R&D to maintain its competitive
edge and fuel future growth. R&D expenditures at Apple, for instance, total $26.251
billion, or 7% of total net sales (www.bstrategyhub.com, 2023).
5) Provision of Services contributed nearly 20% of 2022 Revenue
Apple has been increasing the range of services it offers for many years. For
instance, services contributed nearly 20% of Apple's yearly revenue ($78 billion out of
$394 billion in FY 22), which is the second-largest revenue producer after the iPhone
(52%).
6) Established Retail Stores Worldwide
Apple's retail locations promise a highest customer experience and enable
face-to-face connection with the skilled professionals. As a result of Apple's
individualized care, an increasing number of customers would want to utilize their
outstanding consumer service. Apple currently has 522 Apple stores located across 25
different nations (Campbell, 2023).
7) Vast Selection of Readily Available Applications
According to several analysts, the AppStore for Apple's products, particularly
for iPhones and iPads, has brought in a ton of repeat buyers to the smartphone and
personal computer markets. With 2.11 million apps owned by Apple, Statista estimates
that during the first quarter of 2022, the iPhone can be customized by users (Nguyen,
2022).
33
8) Effective Sales Promotion and Marketing Strategies
Apple has long been considered as the master of advertisement. Apple creates
a lot of talk about its new products before releasing them. It creates a word-of-mouth
strategy to increase brand awareness and boost product demand since its public
relations and marketing are so successful.
9) Product-user focused
Apple consistently considers the consumer and the future while designing its
products. They are always trying to think of something that not even the customer has
thought of yet (Madhav, 2023).
According to Steve Jobs, "if you ask the consumer what he wants, he will want
something new by the time you provide him the same thing." Apple's success is a result
of this way of thinking.
10) Exceptional Ability for Creating Exclusive Hardware, Software, Applications, and
Services
Apple Inc. can design and build its own hardware, software, applications, and
services, the firm can offer its consumers a wide range of distinctive, cutting-edge, and
simple-to-use products and solutions. Customers purchase and value Apple's premium
products for their distinctive, inventive, and user-friendly offerings that easily integrate
into one Apple ecosystem (www.edrawmax.com, n.d.).
3.5.2 Weaknesses
1) High-Priced Items
The price of Apple products must be the company's major weakness. When
customers can easily choose products of equivalent quality but at a lesser price, the
company's most expensive products become vulnerable. Consumers with middle- and
high-income levels can afford the products. However, those with low incomes cannot
easily purchase Apple items.
2) Software Compatibility Issues
A customer enters the Apple ecosystem when they purchase an Apple product.
Apple's products are incompatible with other devices since they do not support
additional software or technology. To keep using their Apple products, customers must
only buy Apple software or accessories.
3) Dependence on Launch of New Products
In order to generate quick profits, the corporation has been compelled to offer
products quickly. Apple first introduced the iPhone 14 series in March 2022, and the
iPhone 14 Plus was introduced in October. A remarkable 77% of all iPhone sales in
the US during the fourth quarter of 2022 were made up by the four iPhone 14 versions
taken together while. 23% of all US iPhone sales in the fourth quarter of 2022 were
made up of older devices (Dazeinfo, 2023). In September 2022, along with the
introduction of the new iPhone 14 series, older devices such the iPhone SE, iPhone
34
12, iPhone 13, and iPhone 13 mini were discontinued in order to increase sales of the
new ones, which resulted in limited product choices of customers (Ibid).
4) Legal Action against the Company
The So Paulo State Court sanctioned a $19 million fine on Apple in October
2022 as a result of the company's decision to stop including chargers with iPhone
deliveries (Periera, 2023).
5) Reliance on iPhone Products
The success of Apple's core product, the iPhone, is crucial to its business. In
2022, sales of iPhones accounted for around 52% of Apple's total income, which
suggests that the company could suffer severely if the device is unable to maintain
strong sales. Also, according to the Apple Annual 2022 Report, when users keep their
smartphones longer and rivalry from other smartphone manufacturers heats up, growth
potential is further diminished.
6) Entrance to a Non-Competency Area
In order to compete with the major players like Netflix, Disney, Citi, Chase,
Paypal, etc., Apple is quickly diversifying into new services including streaming video
content, gaming, and payment services (credit cards). They may be stepping into
sectors where they lack the necessary competence (Tiwari, 2023).
7) Delayed delivery of iPad Products.
Some customers are reportedly having to wait up to nine weeks to get their
hands on an iPad. The delays with iPad sales are a result of Apple's efforts to speed
up the processing time for iPhone orders (Michaels, 2022). Delayed iPad shipments
are being felt by Apple. In the 2022 Annual report of Apple, the iPad was the only
segment of Apple's business with a decline of net sales as compared to the 2021
annual report.
3.6 Internal Factor Evaluation (IFE) Matrix
IFE matrix is a tool for formulating company strategies that gives a summary of the key
advantages and disadvantages in each functional area as well as an assessment of the
connections between those areas. The creation of an IFE Matrix requires intuitive judgments
(David, 2011).
35
Table 3.3 Internal Factor Evaluation (IFE) Matrix
FACTORS
Weight
Rating
Weighted
Score
STRENGTHS
S1
Greatest major brand
0.09
4
0.36
S2
Widely recognized corporation
0.08
4
0.32
S3
Brand of preference
0.07
4
0.28
S4
Thorough research and development
0.10
4
0.40
S5
Provision of services contributed nearly 20% of
2022 revenue
0.08
3
0.24
S6
Established retail stores nationwide
0.05
3
0.15
S7
Vast selection of readily available apps
0.04
3
0.12
S8
Effective sales promotion and marketing
strategies
0.05
4
0.20
S9
Product-user focused
0.05
3
0.15
S10
Exceptional ability for creating exclusive
hardware, software, applications, and services
0.07
4
0.28
WEAKNESSES
W1
High-priced items
0.09
1
0.09
W2
Software compatibility issues
0.05
1
0.05
W3
Dependence on launch of new products
0.04
2
0.08
W4
Legal action against the company
0.01
2
0.02
W5
Reliance on iPhone products
0.05
1
0.05
W6
Entrance to a non-competency area
0.01
2
0.02
W7
Delayed delivery of Ipad products.
0.07
1
0.07
TOTAL
1.00
2.88
Legend: Major weakness (rating = 1), Minor weakness (rating = 2), Minor strength (rating = 3),
Major strength (rating = 4).
Based on the total weighted average score, Apple Inc. has a good internal position,
giving it a competitive edge over its rivals. The greatest strength the company has is the
thorough research and development with a weight of 0.10. To keep its competitive edge and
36
support future growth, Apple continues to make significant expenditures in R&D. In its fiscal
year 2022, Apple Inc. spent a record 26.25 billion US dollars on R&D, up approximately four
billion from the previous year. A number of well-known devices, including the iPhone, iPod,
MacBook, and iPad, have been released as a result of the company's significant investment in
research and development over the years (Laricchia, 2022).
On the other hand, Apple’s greatest weakness is having high-priced items, with a
weight of 0.09. Due to the company's products often being priced more than those of its
competitors, Apple's pricing strategy is vulnerable (Bhasin, 2023). Only high-earning people
can purchase their products due to their high prices. With consumers being more price-sensitive
in developing nations like India (Castaneda, 2019).
Apple's market share may be constrained by its premium pricing. A total score of 2.88,
which is higher than the industry average of 2.5, indicates that the strengths that the company
has, can help mitigate the drawbacks that are present inside the company.
3.7 Strengths, Weaknesses, Opportunities, and Threats (SWOT) Matrix
The SWOT Matrix is a crucial matching tool that aids managers in creating four different
types of strategies: SO (strengths-opportunities), WO (weaknesses-opportunities), ST
(strengths-threats), and WT (weaknesses-threats) Strategies (David, 2011).
SO Strategies make use of a company's internal advantages to seize available
chances from the outside. By utilizing chances from the outside world, WO Strategies seek to
strengthen internal weaknesses. To avoid or lessen the effects of external threats, ST
Strategies make use of a company's advantages. WT Strategies are defensive methods for
minimizing internal vulnerabilities and fending off external dangers (David, 2011).
Table 3.4 Strengths, Weaknesses, Opportunities, and Threats (SWOT) Matrix
Strengths
Weaknesses
S1. Greatest Major Brand
S2.
Widely
W1.High-Priced Items.
recognized W2. Software Compatibility
Corporation
Issues.
S3. Brand of preference
W3. Dependence on launch
of new products.
S4.
Thorough
Research
Development.
S5.
Provision
and W4. Legal action against
the company.
of
services W5. Reliance on Iphone
contributed nearly 20% of 2022 products.
revenue.
S6.
Established
retail
stores W6. Entrance to a Non-
37
nationwide.
Competency Area.
S7. Vast selection of readily W7. Delayed delivery of
available apps
products.
S8. Effective sales promotion and
Marketing strategies
S9. Product- user focused.
S10.
Exceptional
creating
software,
exclusive
ability
for
hardware,
applications,
and
services.
Opportunities
SO Strategies
WO Strategies
O1. Growing demand for Retain the creative design thinking Increase
supply
wearables
of
technology and product development through production
and
wearables
and accessories products the Research and Development to technology and accessories
create
technology
unique
and
products. (S4, O1)
wearables products to increase its
accessory percentage contribution on
net sales. (W5, O1)
O2. Growing popularity of Use brand image and establish Utilize the growing demand
the App Store and digital brand loyalty through offering of
services
by
offering
services also expansion quality services tailored to the exclusive
into emerging markets
needs of the market and increase applications
mobile
on
products
brand awareness through market and quality services that
penetration in emerging markets. equate to premium pricing.
(S3, O2)
(W1, O2)
O3. Increasing demand Diversify offerings in the music Highlight products related to
for
streaming
services streaming, Apple TV, and self- streaming such as music
with high growth potential driving technologies that cater the and TV streaming through
demand of customers. (S9, O3, advertisements to increase
O1)
sales of already existing
products. (W3, O3)
O4. Growing demand for Increase the number of retail Increase the quantity of
online education
stores nationwide offering a huge Apple products other than
quantity of available products, Iphones. Supply of Ipad and
especially Wearables, Ipad and Mac
Mac. (S6, O4, O1)
products
can
be
increased to cater needs of
students
and
teachers
38
under an online set -up
education. (W5, O4)
O5. Increasing demand Advance
to
for remote work solutions vehicles
and electric vehicles
building
by
electric Take a step on utilizing
establishing unrelated
diversification
partnerships in the automobile and secure great deals with
sector. (S1, O5)
trusted
supply
chain
partners. (W6, O5)
Improve their delivery time
and supply chain on other
products like Ipad products
to optimize delivery time to
meet the demand for such
products. (O5, W7)
Threats
ST Strategies
WT Strategies
T1. Intense competition in Focus on strong brand recognition Conduct market research to
the smartphone market
and customer loyalty to maintain determine if reducing the
market share and to fend off prices of high-end products
competitors. (S1, T1)
would help the company
remain competitive in the
smartphone market against
competitors. (W1, T1)
T2. Dependence on third- Focus on product differentiation Invest
party
suppliers
manufacturers
in
research
and and innovation to stand out in a development
to
and
explore
crowded market and create a opportunities
in
non-
competitive advantage. (S10, T1) competency
areas
and
diversify
the
company's
product offerings to reduce
the
impact
competition
of
in
intense
the
smartphone market. (W6,
T1)
T3.
Regulatory
risks; Expand the company's reach in
Changing regulations and the
legal issues
market
regions
into
through
the
existing
effective
marketing and sales strategies to
39
maintain and increase its market
share against competitors. (S2,
T1)
T4. Fluctuating foreign Diversify the supply chain by Diversify the supply chain
exchange
rates
and investing in developing in-house by investing in developing
economic uncertainties
manufacturing
capabilities
to in-house
manufacturing
reduce dependence on third-party capabilities to reduce the
suppliers and manufacturers. (S1, dependence on third-party
T2)
suppliers
and
manufacturers and improve
the timely launch of new
products. (W3, T2)
T5. Cybersecurity threats Invest
in
research
and Invest
in
regulatory
development to stay ahead of compliance to ensure the
changing regulations and develop company
meets
legal
products that meet new legal requirements and changes
requirements. (S4, T3)
in regulations to avoid legal
issues and penalties. (W4,
T3)
Adjust pricing strategies to remain Expand the product line to
competitive in the market while include more non-iPhone
taking
into
consideration
the products to reduce reliance
fluctuating foreign exchange rates on a single product and
and economic uncertainties. (S6, reduce
T4)
the
impact
fluctuating
of
foreign
exchange
rates
and
economic
uncertainties.
(W4, T4)
Invest in cybersecurity research Invest
in
cybersecurity
and development to enhance the research and development
company's ability to prevent and to enhance the compatibility
respond to cybersecurity threats. of the company's software
(S4, T5)
with different devices while
ensuring that security is
maintained. (W4, T5)
40
3.8 Internal-External (IE) Matrix
The IE Matrix is a tool for displaying organizational divisions in a schematic diagram.
The matrix divides Apple into nine distinct divisions. Each cell represents the percentage sales
contribution of each division (Utami and Ali, 2012). The matrix is determined by two dimensions:
the External Factor Evaluation score on the y-axis and the Internal Factor Evaluation score on
the x-axis.
Figure 3.2 Apple Internal-External (IE) Matrix from Internal External Matrix by Candra,
(2014), https://www.researchgate.net/figure/Internal-External-Matrix_fig1_281026231
Based on Figure 3.2 above, IFE and EFE's total weight score of 1.00 to 1.99 indicates
a weak internal position, 2.00 to 2.99 indicates average, and 3.0 to 4.0 indicates strong. The
EFE score for Apple is 3.02, while the IFE score is also 2.88. Cells I, II, and IV are positioned
as a 'grow and build strategy,' whereas cells III, V, and VII are positioned as a 'hold and maintain
strategy,' and the final cell of VI, VIII, and VIV are positioned as a 'harvest or divest' strategy.
According to the IE matrix, Apple is in cell II, indicating that the company should pursue a growth
and build strategy.
Apple could implement market development, product development, and market
penetration strategies (Cassidy et al., 2013). Apple can sell their current product in new market
segments under market development. Apple has expanded to 150 countries, but there are still
additional countries where Apple could expand (Malaymail, 2020). Apple, for example, could
sell its products in new markets such as Africa and Indonesia. Second, for product
development, Apple could create new products in the current market. Apple excels at creating
new products to meet customer demands. Apple begins its journey with the invention of "Apple
I" and continues to invent new products and services such as Apple TV and the App Store
(Weinberger and Hartmans, 2020).
41
Apple is still creating new products. Market penetration is defined as the sale of existing
products in markets in order to increase the company's market share. Apple, for example, sells
more iPhones in its existing markets. Apple can implement this strategy by making the iPhone
available for purchase on various platforms such as telecommunication companies, Apple
stores, and the Apple website.
3.9 Quantitative Strategic Planning Matrix (QSPM)
The Quantitative Strategic Planning Matrix (QSPM) comprises the Stage 3 of the
strategy formulation analytical framework. This technique objectively indicates which alternative
strategies are best. A QSPM can especially enhance strategic choice in multinational firms
because many key factors and strategies can be considered at once (David, 2011). In Apple
Inc., the QSPM determines the relative attractiveness of various strategies based on the extent
to which key external and internal critical success factors are capitalized upon or improved.
Table 3.5 Quantitative Strategic Planning Matrix (QSPM)
STRATEGIC ALTERNATIVES
Key Factors
1
2
3
Retain the
creative
design
thinking and
product
development
Expand the
reach of its
existing
goods and
services into
existing
regions
Improve their
delivery time
and supply
chain on
other
products like
iPad products
Weight
AS
TAS
AS
TAS
AS
TAS
Growing demand for wearables
technology and accessories
products
0.15
4
0.6
2
0.30
3
0.45
Growing popularity of the App
Store and digital services also
expansion
into
emerging
markets
0.09
1
0.09
4
0.36
2
0.18
Increased
demand
for
streaming services with high
growth potential
0.10
3
0.30
2
0.20
4
0.40
Growing demand for
education
0.08
-
-
4
0.32
2
0.16
0.09
2
0.18
-
-
4
0.36
Opportunities
online
Increased demand for remote
work solutions and electric
vehicles
42
Threats
Intense competition
smartphone market
in
the
0.15
4
0.6
1
0.15
2
0.30
Dependence on third-party
suppliers and manufacturers
0.09
3
0.27
4
0.36
2
0.18
Regulatory risks; Changing
regulations and legal issues
0.08
3
0.24
2
0.16
4
0.32
Fluctuating foreign exchange
rates
and
economic
uncertainties
0.09
2
0.18
4
0.36
3
0.27
Cybersecurity threats
0.08
4
0.32
3
0.24
0
Greatest major brand
0.09
4
0.36
2
0.18
1
0.09
Widely recognized corporation
0.08
3
0.24
2
0.16
4
0.32
Brand of preference
0.07
2
0.14
1
0.07
4
0.28
0.10
4
0.40
3
0.30
2
0.20
Provision
of
services
contributed nearly 20% of 2022
revenue
0.08
2
0.16
4
0.32
1
0.08
Established
nationwide
0.05
3
0.15
4
0.20
2
0.10
0.04
2
0.08
3
0.12
4
0.16
Effective sales promotion and
marketing strategies
0.05
3
0.15
1
0.05
4
0.20
Product-user focused
0.05
1
0.05
4
0.20
2
0.10
Exceptional ability for creating
exclusive hardware, software,
applications, and services
0.07
4
0.28
2
0.14
1
0.07
High-priced items
0.09
-
-
1
0.09
4
0.36
Software compatibility issues
0.05
1
0.05
3
0.15
2
0.10
Dependence on launch of new
products
0.04
4
0.16
1
0.04
3
0.12
Legal action
company
0.01
4
0.04
2
0.02
1
0.01
Strengths
Thorough
research
development
and
retail
Vast selection
available apps
of
stores
readily
Weaknesses
against
the
43
Reliance on iPhone products
0.05
4
0.20
3
0.15
2
0.10
Entrance to a non-competency
area
0.01
1
0.01
2
0.02
3
0.03
Delayed delivery of products
0.07
1
0.07
3
0.21
4
0.28
TOTAL
5.32
4.87
5.22
Attractiveness Scores is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive,
and 4 = highly attractive
Apple's ability to take advantage of market opportunities in the best way possible is the
primary factor in its current level of success. The alternative strategy to retain its creative design
thinking and product development with a total attractiveness score of 5.32 has the most
attractive strategies, considering all the relevant external and internal factors that could affect
the strategic decisions. With this, the top 3 key factors are: 1) growing demand for wearables
technology and accessories products; 2) intense competition in the smartphone market; and,
3) thorough research and development.
Steve Jobs concentrated on producing high-quality goods and services with an eye
toward ease of use and straightforward design. Apple's success in the market and dominance
of the technology industry in all spheres, including usability, design, and user interface, were
made possible by the use of design thinking.
The iPhone, which Apple introduced in 2007, quickly became everyone's favorite
device. Its popularity and commercial supremacy can be attributed to how carefully it was
thought out. Compared to other phones on the market at the time, the entire experience was
unique.
Most people make the mistake of thinking design is what it looks like. People think it’s
this veneer — that the designers are handed this box and told, ‘Make it look good!’ That’s not
what we think the design is. It’s not just what it looks like and feels like. Design is how it works
(Jobs, 2003).
When Steve Jobs rejoined Apple in 1997, he used design thinking techniques to
transform the company's vision. The brand continues to employ the same tactic now. Even
though Jobs isn't with us anymore, he established one of the most prosperous businesses, and
as of August 2020, his net worth was estimated to be close to $2 trillion.
Apple shows us a clear lesson on how design thinking and innovation can lead a
company to reach greater heights. Apple has secured the leading position in the competitive
market today, and have placed their customers at the heart of the process. Design thinking
engages the company to think critically and out of the box. Instead of just taking a problem and
using machines to solve it, it allows companies to come up with different solutions and
approaches (Bahirat, 2022).
CHAPTER IV
FINANCIAL PERFORMANCE ANALYSIS
Financial Projections are the numerical representation of an organization. They expose
the entrepreneurs' fundamental presumptions about their businesses' viability and describe
their hopes for their future (Gordon, 2022). Probably most crucially, they aid in evaluating the
business potential by the entrepreneur, lenders, and investors.
Financial Ratio Analysis
Financial ratio analysis is the most popular way to identify an organization's assets and
liabilities in dividends, finance, and investments. Financial ratios can indicate strengths or
weaknesses in management, marketing, production, research and development, and
management information system operations due to the close relationships between the various
functional divisions of a corporation (David, 2011). The 5 key financial ratios most commonly
used are liquidity, leverage, activity, profitability, and growth ratios.
4.1 Liquidity ratios
These ratios gauge a company's capacity to pay short-term debts as they come due.
This comprises the current ratio and the quick or acid-test ratio. In the Fiscal Annual Report
submitted to the Securities and Exchange Commission of the United States, the following
values were yielded:
4.1.1 Current Ratio
The current ratio gauges how well a company can pay its short-term debts. It is determined by
dividing the current assets by the company's current liabilities.
Table 4.1 Apple’s Current Ratio
Year
2022
2021
2020
Current Ratio
0.8794
1.0746
1.3636
The ideal current ratio for a company is between 1.2 and 2, which indicates that it has
two times as many current assets as liabilities to service its debts. If the current ratio is less
than 1, the company's liquid assets are insufficient to meet its current liabilities.
(freshbooks.com, 2019) In 2022, the company's current ratio was lower than in the previous
two years.
45
4.1.2 Quick or Acid-Test Ratio
This ratio presents how well a company can fulfill its short-term obligations without selling its
inventory.
Table 4.2 Apple’s Quick or Acid-Test Ratio
Year
2022
2021
2020
Quick Ratio
0.85
1.02
1.33
Apple Inc.'s quick ratio is equivalent to 0.847 or 0.85 after subtracting inventory from
current assets and dividing it by the current liabilities. A good quick ratio is often anything
greater than 1 or 1:1. If the ratio is 1:1, the company's liquid assets and current liabilities are
equal. A greater ratio means the business could more than cover its current liabilities. Apple,
Inc., however, will have a quick ratio of less than 1 in 2022. It indicates that the business lacks
sufficient liquid assets to settle its immediate liabilities. It's possible that a corporation has
favorable conditions with its lenders, making such short-term debt payments less frequent than
they seem on the balance sheet. (Girardin, 2022)
4.2 Leverage Ratios
Leverage ratios quantify how much debt a company has used to finance itself.
4.2.1 Debt-to-total-assets Ratio is the proportion of overall funds provided by creditors.
Table 4.3 Apple’s debt-to-total assets Ratio
Year
2022
2021
2020
Debt-to-total assets
Ratio
0.34
0.36
0.35
Financial institutions typically utilize the debt-to-asset ratio to evaluate a company's
capacity to service its existing debt as well as its capacity to generate capital through new debt.
The debt-to-equity ratio indicates that most assets are financed by debt when the ratio is larger
than 1.0, and this ratio is quite comparable. After computations, Apple Inc. has a Debt-to-totalassets Ratio of 0.34 for the fiscal year 2022. From a risk standpoint, debt ratios of 0.4 or less
are preferred, whereas a debt ratio of 0.6 or more makes borrowing money more challenging.
Apple Inc.'s ratio of 0.34 indicates that borrowing may be favorable for the company.
4.2.2 Debt-to-equity Ratio is the ratio of the total funding provided by owners vs. creditors.
Table 4.4 Apple’s Debt-to-equity Ratio
Year
2022
2021
2020
Debt-to-equity
Ratio
1.95
1.73
1.51
46
The debt-to-equity (D/E) ratio measures a company's financial leverage, and is
determined by dividing its total liabilities by the value of its shareholders. (Rathburn, 2022) Any
debt-to-equity ratio that is less than 1.0 is considered to be favorable. Typically, a ratio of 2.0
or greater is seen as dangerous. The "high" zone is a ratio between 5 and 7. With Apple Inc.’
The DTE ratio of 5.96 or 6 indicates that the company has more liabilities than its shareholders'
equity.
4.2.3 Long-Term Debt-to-Equity Ratio is the long-term capital structure of a corporation that
balances debt and equity.
Table 4.5 Apple’s Long-Term Debt-to-Equity Ratio
Year
2022
2021
2020
Long-Term Debt-toEquity Ratio
0.6614
0.6336
0.6016
A variant of the debt-to-equity ratio is the long-term debt-to-equity ratio. The debt-toequity ratio considers short- and long-term debt and other fixed payments. Long-term debt is
the only debt calculated in long-term debt to equity. Since long-term debt is more risky and
burdensome than other liabilities, some analysts prefer the latter ratio (Tomasetti, 2023). The
long-term debt to equity ratio can be quite important in assessing a corporation's danger.
Understanding the percentage of debt, especially long-term debt, can help investors and
creditors decide if they can trust a company to run a profitable operation. Unfortunately, there
isn't a precise ratio for this.
4.2.4 Times-Interest-Earned Ratio is a company's ability to experience a drop in profits without
going into default on its obligation to pay interest.
Table 4.6 Apple’s Times-Interest-Earned Ratio
Year
2022
2021
2020
Times-Interest-Earned
Ratio
-1.1%
+78.5%
+29.1%
The Times Interest Earned (TIE) ratio gauges a company's capacity to pay down its
debt consistently. The main objective of the TIE is to estimate a company's likelihood of default.
As a result, it becomes easier to calculate important debt characteristics, such as the right
interest rate to be applied or the maximum amount of debt a business may accept without
risking financial ruin. The interest coverage ratio for Apple's most recent twelve months is 35.2x.
For the fiscal years ending in September 2018 to 2022, Apple's interest coverage ratio averaged
29.0x. Between the fiscal years ending in September 2018 and 2022, Apple had an average
interest coverage ratio of 23.1x. In September 2019, Apple's interest coverage ratio of 17.9x
reached a 5-year low. Apple's interest coverage ratio increased in 2020 (23.1x, +29.1%) and
47
2021 (41.2x, +78.5%), whereas it declined in 2018 (21.9x, -17.1%), 2019 (17.9x, -18.3%), and
2022 (40.7x, -1.1%).
4.3 Activity Ratios
These quantify the efficiency with which a company utilizes its resources. Analysts,
also known as efficiency ratios, use activity ratios to assess a company's inventory
management practices, which are crucial to its operational flexibility and overall financial health.
(Kenton, 2020)
4.3.1 Inventory turnover analyzes whether a company has excessive inventories of completed
goods and whether it is selling its stock more slowly than the industry average.
Table 4.7 Apple’s Inventory Turnover
Year
2022
2021
2020
Inventory Turnover
45.1973
32.3679
41.753
The number of times a business has sold and restocked its inventory over a
predetermined period of time is known as the inventory turnover ratio. (Jenkins, 2022) The
formula can also determine the number of days to sell the current inventory. The inventory
turnover ratio is derived by dividing the cost of items by the average inventory for the same time
period. A greater ratio typically denotes good sales, while a lower ratio generally denotes dismal
sales. In contrast, a greater ratio can signify having too little inventory, while a lower one would
signify having too much.
4.3.2 Fixed Assets Turnover determines the use of facilities and equipment and sales
productivity.
Table 4.8 Apple’s Fixed Assets Turnover
Year
2022
2021
2020
Fixed Assets
Turnover
9.36
9.28
7.47
An efficiency ratio called fixed asset turnover (FAT) shows how effectively or efficiently
a company uses fixed assets to produce sales. A greater fixed asset ratio often denotes more
efficient use of investments in fixed assets to produce revenue. This ratio is frequently
examined along with profitability and leverage ratios. (CFI Team, 2022) An asset turnover ratio
of 2.5 or above is typically regarded favorably in the retail industry. Considering Apple Inc.'s
FAT of 9.36, it yields a favorable result. The net fixed asset turnover ratio for Apple Inc.
increased between 2020 and 2021, and 2022.
48
4.3.3 Total Assets Turnover shows whether a company is making enough money to justify
the magnitude of its asset investment.
Table 4.9 Apple’s Total Assets Turnover
Year
2022
2021
2020
Total Assets
Turnover
1.1179
1.0422
0.8476
A company's sales are contrasted with its asset base using the total asset turnover
ratio. The ratio, frequently used by outside parties to assess how well a corporation is run,
gauges how well an organization can generate sales. The total assets turnover of Apple Inc for
September 2022 is 1.12, which means that the company can generate enough sales and gain
revenue. This is also higher than the total assets turnover in 2021 and 2020.
4.3.4 Accounts Receivable Turnover depicts how long a business typically takes to collect
credit sales.
Table 4.10 Apple’s Accounts Receivable Turnover
Year
2022
2021
2020
Accounts
Receivable
Turnover
6.4716
7.1024
7.3312
The efficiency a business can collect on its receivables or turnover ratio measures its
credit to clients. The ratio also counts the number of times a company's receivables are turned
into cash over a specific time period. (Munichiello, 2022) Apple Inc.'s accounts receivable
turnover for 2022 is lower than 7.10 and 7.33 in 2021 and 2020, respectively. However, 7.8 is
a desirable accounts receivable turnover ratio. Thus, a business will typically recover its
accounts receivable 7.8 times annually. A higher figure is preferable since it indicates that the
business is recovering its accounts receivable more quickly. The company has values less than
the desirable number of 7.8. Despite that, it can still recover all of its accounts receivable at
6.47, 7.10, and 7.33 in 2022, 2021, and 2020, respectively.
4.3.5 Average Collection Period is the days a business typically takes to recover from credit
sales.
Table 4.11 Apple’s Average Collection Period
Year
2022
2021
2020
Average Collection
Period
56.4002
51.391
49.7875
49
To ensure they have enough cash to cover their financial responsibilities, businesses
employ the average collection period. The average collection period is crucial for businesses
that largely rely on receivables for their cash flows since it shows how well a company manages
its accounts receivable (Boyle, 2022). Based on the values, the company has an average
collection period of 56, 51, and 49 days from 2022 to 2020. Improvements are also reflected
and observed as these values increase.
4.4 Profitability Ratios
Profitability Ratios determine the returns produced on sales and investments and are
used to gauge the management team's general effectiveness.
4.4.1 Gross profit margin is the overall margin that can be used to make a profit and cover
operating costs.
Table 4.12 Apple’s Gross Profit Margin
Year
2022
2021
2020
Gross Profit Margin
43.3096
41.7794
38.2333
A company's sales are contrasted with its asset base using the total asset turnover
ratio. The ratio, frequently used by outside parties to assess how well a corporation is run,
gauges how well an organization can generate sales (Bellucco, 2021). For many different types
of enterprises, including shops, restaurants, manufacturers, and other goods producers, a
gross profit margin ratio of 50 to 70% would be seen as healthy. Apple Inc.'s gross profit margin
for the fiscal year of September 2022 is 43.31%. This is below 50% but is higher than in 2021
and 2020.
4.4.2 Operating profit margin is the absence of tax and interest concerns in profitability.
Table 4.13 Apple’s Operating Profit Margin
Year
2022
2021
2020
Operating Profit
Margin
30.29
29.78
24.15
The operating profit of Apple Inc. in 2022 is 30.29%, which indicates a good margin.
The ideal operating margin for businesses is 15% or more. 10% is regarded as typical. The
sector a company operates in and macro trends to determine whether margins are increasing
or decreasing are important factors when assessing a company's operating margin
(Macrotrends, 2022). Despite being in a pandemic, Apple Inc. still had a good operating profit
margin.
50
4.4.3 Net profit margin is the earnings after taxes per dollar of sales.
Table 4.14 Apple’s Net Profit Margin
Year
2022
2021
2020
Net Profit Margin
25.3096
25.8818
20.9136
How well a company performs compared to other market players in its industry can be
determined by its profit margin. Although there's no magic number, a reasonable profit margin
will often lie between 5% and 10%. Electronics usually have a common net profit margin of
5.70% (brex.com, 2021). The net profit margin of Apple, Inc., with 25.31%, yields a high and
favorable return.
4.4.4 Return on Total Assets (ROA) is earnings after taxes per dollar of assets, also known
as return on investment (ROI).
Table 4.15 Apple’s Return on Total Assets (ROA)
Year
2022
2021
2020
Return on Total
Assets
43.3096
41.7794
38.2333
A financial ratio known as return on assets (ROA) measures a company's profitability
in relation to its total assets. Generally, a ROA of over 5% is regarded as good, and one of over
20% is exceptional (Eichler, 2022). Apple, Inc's ROA is exceptional, resulting in 28.29%. This
shows that the company efficiently generates profit from its total assets.
4.4.5 Return on Stockholders' Equity (ROE) is the earnings after taxes per dollar invested
by owners in the company.
Table 4.16 Return on Stockholders’ Equity (ROE)
Year
2022
2021
2020
Return on
Stockholders’
Equity (ROE)
196.9589
150.0713
87.8664
ROE is a barometer of a company's profitability and how well it produces profits.
Together with other financial criteria, ROE is used to assess equities. Yet it's crucial to
remember that there are more variables to consider when assessing a stock than just return on
equity (fastpayltd.co.uk, 2021). Analyzing the Return on Stockholder’s Equity of Apple Inc. in
2022, it can be seen that the company has made
51
4.4.6 Earnings per share (EPS) earnings available to common stockholders of the firm.
Table 4.17 Apple’s Earnings per share (EPS)
Year
2022
2021
2020
Earnings per share
(EPS)
4.88%
66.22%
-3.90%
The earnings per share of Apple Inc. showed high and low values for the past three
years. It can be observed that the company hit a negative value in 2020, which was the year
when the pandemic affected the world. The company, however, made a high percentage by
the next year. In 2022, it had earnings per share of 4.88%. All of these values were based on
the basic earnings per share.
4.4.7 Price-Earnings Ratio shows the firm's appeal on the equity markets.
Table 4.18 Apple’s Price-Earnings Ratio
Year
2022
2021
2020
Price-Earnings
Ratio
22.55
25.00
34.78
Price-Earnings ratio evaluates a company's performance and reveals how the market
perceives its potential for future expansion. A greater P/E ratio shows that market participants
expect a company's earnings to grow. The closing price for the AAPL Stock on September 23,
2022, was 149.95. This is the basis as the financial statements were prepared the date after.
With that, Apple Inc.'s price-earnings ratio for 2022 is 22.55. On average, the S&P 500 Index
stocks' P/E ratio is 25. P/E ratios are often greater for businesses like technology firms that
grow more quickly than the norm. A higher P/E ratio indicates that investors are prepared to
pay a higher share price due to future growth forecasts (Murphy, 2022).
4.5 Growth ratios
Growth ratios evaluate the company's capacity to retain its financial standing as the
economy and industry expand.
4.5.1 Sales growth ratio shows the sales growth for the company.
Table 4.19 Apple’s Sales Growth Ratio
Year
2022
2021
2020
Sales growth ratio
7.79%
33.26%
5.51%
52
The sales growth rate gauges how quickly a company can boost sales revenue over a
predetermined period (Alfred, 2020). Apple's yearly sales in 2022 increased by 7.79% from
2021 to $394.328 billion. In 2021, it increased from $365.817B 2020 by 33.26% to $365.817B.
And the yearly sales in 2020 were $274.515 billion, up 5.51% over the previous year.
4.5.2 Net income growth ratio depicts the growth rate of a company through its profits.
Table 4.20 Apple’s Net Income Growth Ratio
Year
2022
2021
2020
Net income growth
ratio
11.74%
45.62%
6.67%
The net income growth rate calculates the percentage change in net income from one
period to the next, often a year, a quarter, or a month (Allen, 2018). Apple's 2022 annual gross
profit was $170.782 billion, up 11.74% from 2021. Apple's yearly gross profit in 2021 increased
from 2020 by 45.62% to $152.836 billion. Apple's yearly gross profit in 2020 was $104.956
billion, up 6.67% over the previous year. This can be viewed as an indicator of a firm's
operational effectiveness and investment desirability, but is greatly influenced by the aims and
problems of a company and should thus be evaluated in conjunction with other measures like
revenue growth, margins, industry life stage, etc.
4.5.3 Earnings per share growth ratio determines the growth of the firm in EPS.
Table 4.21 Apple’s Earnings per Share Growth Ratio
Year
2022
2021
2020
Earnings per share
growth ratio
8.91%
71.04%
10.44%
EPS growth is the increase in the company's reported profits per share figures. In other
words, it describes the rate of growth of EPS over a specific period of time (Yu & Sloan, 2023).
Above 15% is considered an excellent EPS growth rate, although higher revenue growth rates
are typically experienced before it. Apple Inc.'s 8.91 growth rate in the fiscal year 2022 still
showed good growth despite being less than the excellent EPS growth rate.
4.5.4 Dividends per share growth ratio is the company's growth rate in dividends per share.
Table 4.22 Apple’s Dividends per Share Growth Ratio
Year
2022
2021
2020
Dividends per
share growth ratio
3.2% (decline)
3.78% (decline)
5.74% (decline)
53
The annualized percentage rate of growth in a stock's dividend over time is known as
its dividend growth rate. Many established organizations attempt to regularly enhance the
dividends given to their stockholders (Chen & Anderson, 2020). Considering that Apple, Inc.
has more dividends than the previous fiscal year, the 2022 dividends per share growth ratio
yielded a result of 3.2%. The decline was lower compared to the previous two years.
CHAPTER V
RECOMMENDATIONS
5.1 Recommendations on Vision Statement
Apple’s Vision Statement: "Apple is committed to bringing the best personal computing
experience to students, educators, creative professionals, and consumers worldwide through
its innovative hardware, software, and Internet offerings.” Although this statement is concise
and easy to understand, it may use some improvement to express Apple's principles and
objectives better. Here are a few recommendations:
1) Putting the Customer First
Apple products are renowned for their user-friendly interfaces and user-centric
design. Therefore, Apple's vision statement should underline the company's dedication
to providing its consumers with the most incredible experience possible. For instance,
a rewritten vision statement might say, "Our vision is to create excellent products that
enhance people's lives and surpass their expectations."
2) Accentuate Innovation
Apple is known for being a corporation that pushes the limits of technology. An
updated vision statement may emphasize this dedication to innovation: "Our vision is
to invent and change technology to build a better society continuously."
3) Represent the Company’s Principles
Apple has a reputation for having solid corporate values that emphasize
diversity, inclusivity, and sustainability. These values might be included in an updated
vision statement: "Our vision is to create goods that are sustainable, ethical, and
inclusive, reflecting our commitment to social responsibility and diversity."
4) Consider the Future
Apple is a business that consistently considers the future and foresees the
requirements of its clients. A new vision statement, for instance, "Our vision is to predict
and influence the future by generating innovative goods that satisfy the growing
demands of our clients," may represent this future-focused mindset.
In general, a powerful vision statement should encourage and excite both customers
and staff. By integrating these recommendations, Apple may develop a vision statement that
expresses company beliefs, objectives, and dedication to innovation and customer happiness.
5.2 Recommendations on Mission Statement
Apple’s Mission Statement is “To design, develop, and market consumer electronics, computer
software, and personal computers.” While the essence of what Apple aspires to do is captured
55
in this statement, it might be improved to express its mission and objectives better. Here are a
few recommendations:
1) Describe the company's mission
A compelling mission statement should express the company's mission and
the reasons for its existence. "Our mission is to empower people with technology that
inspires creativity, simplifies their lives, and connects them to the world," might be
Apple's revamped mission statement.
2) Accentuate innovation
Apple is renowned for its ground-breaking goods and solutions that transform
how people live and conduct business. A new mission statement, for instance, "Our
mission is to consistently develop and push the boundaries of technology to create
products that enrich people's lives and alter industries," may emphasize innovation.
3) Represent the company's values
Apple is committed to diversity, inclusion, social responsibility, and
environmental sustainability. These values could be included in a new mission
statement: "Our mission is to create goods that are sustainable, ethical, and inclusive,
reflecting our commitment to social responsibility and diversity."
4) Keep an eye on the customer.
Apple's success depends on its ability to design products with a remarkable
user experience. A rewritten mission statement, for instance, "Our mission is to create
the best possible user experience by designing products that are easy, smooth, and
pleasurable to use," would emphasize the importance of the consumer.
A strong mission statement should, in general, clearly describe the company's purpose,
beliefs, and objectives in a way that motivates both customers and clients. By combining these
suggestions, Apple might develop a mission statement that shows its dedication to innovation,
consumer happiness, and social responsibility.
5.3 Recommendations on Goals
As Apple is focused on sustainability and profitability, the company can focus on
improving services related to technical resolutions and take advantage of the opportunities in
the industry. Apple is also dedicated to offering the best quality technology experience possible
to students, teachers, employees, and other customers through its cutting-edge hardware,
software, and networked applications. They can improve and achieve sustainability by being
aware of the customers’ needs and demands. Apple already has a product feedback section
on its website. However, they can improve the collection by allowing customers to complete
feedback forms in person during an in-store visit and/or purchase and through email
(www.macs4u.com, 2021). After a customer makes a purchase, the company emails them a
survey. Consumers are asked to rate their satisfaction and likelihood of making another
56
purchase. As a result of the surveys being issued right away after purchase, Apple can gather
prompt, precise feedback from customers (Aubagna, 2020). It is recommended that Apple
continue to send surveys in emails even after the purchase and emphasize product feedback
on its website so that relevant feedback can be gathered.
One of its goals of Apple is continuous product innovation. Aside from this, it is
recommended that Apple increase the services offered to their products. Based on Apple’s
official website, there are 20 authorized service providers in the Philippines. They may consider
increasing the number of authorized service providers offering fee-based services and support.
Through this, the company can help maintain clients and establish a trustworthy brand image
while adding additional revenue from the services provided.
Earlier in 2022, the Self Service Repair, which would give users access to Applebranded tools and components, was unveiled by Apple in the US. This was available for the
iPhone 12 and iPhone 13 lines. In August 2022, the company expanded its repair program to
MacBook Air and MacBook Pro (Panettieri, 2022). This program was a colossal step Apple has
made in reducing e-waste problems. With the launch of this service, it is recommended that
Apple continues to expand to many countries besides the US. They could also expand the
service to their various apple products. This could help reduce the obsolescence of
malfunctioning products, which eventually become e-waste.
By 2030, Apple aims for carbon neutrality throughout its entire supply chain for
manufacturing, corporate operations, and product lifecycle. With this new goal, every Apple
device sold by 2030 will have a zero net impact on climate change. With this goal set by the
company, aside from making the full supply chain carbon neutral, Apple might consider giving
a thorough plan for the growing e-waste problem. In the past years, Apple was criticized for
limiting its repair commitments, indirectly urging people to discard technology rather than repair
and upgrade it (Cooper, 2022).
5.4 Recommendations on Strategies
In the Quantitative Strategic Planning Matrix, three different strategies are being
evaluated. These are:
1) Maintain Apple's innovative product development and design thinking.
2) Extend the geographic reach of its current products or services.
3) Enhance its supply chain and delivery times for other products like iPad products.
Based on this matrix, maintaining Apple’s innovative product development and design
thinking is the alternative strategy with the highest total attractiveness score of 5.32. This
reveals that the first strategy can be mainly considered of all three alternatives. The next
strategy to be considered is the third strategy, which is to enhance the supply chain and delivery
times for other products, with a total attractiveness score of 5.22, and the last would be to
extend the geographic reach of its current products or services with a total attractiveness score
of 4.87.
57
Apple has been using different strategies to maintain its competitive edge in the digital
market (www.IvyPanda.com, 2022). To stay on top in a challenging and quickly evolving
technology sector, Apple must retain its creative design thinking and product
development, especially wearable products. Apple must acknowledge that shifting
demographics, consumer demands, and technological advancements have created new
expectations. So, the business must continue incorporating innovation and design thinking
through research and development into all its goods and services. Moreover, Apple has an
opportunity to develop its product offering and boost sales due to the rising demand in the
wearables market. Since Apple already has wearable products, it can continually improve its
Apple Watch and Airpod models and/ or add varieties for such products to increase the number
of satisfied customers due to their positive experience with the organization's present products
and services. A strategy that uses research and development with a focus on modifying and
improving outcomes to specific demands while also connecting external opportunities to
internal strengths and being linked with the company's goals will probably positively impact the
business (David, 2011).
In the 2022 3rd Quarter Report of Apple, there was a decrease in the net sales of
Wearables due to the lower net sales of AirPods and Apple Watch. This was before the release
of the new generation of the two products. However, in the 2022 Annual Report, the net sales
for Wearables increased by 7% compared to 2021 due primarily to higher net sales of newly
released versions of the Apple Watch and AirPods in September. The increase in net sales of
Wearables has been constant by 25% in 2020 and 2021. Although there is an increase of 7%
in 2022, this is much lower than the two previous years. According to Charlton (2023), it is
challenging to suggest upgrading to the Apple Watch Series 8 (2022) because it has a relatively
slight improvement over the Series 7 (2021), with the body temperature sensor and Crash
Detection being the only noteworthy enhancements. Thus, clients looking to move from an older
Apple Watch model may prefer to wait for a newer version or a reduced-priced Apple Watch
Series 7 (Charlton, 2023).
Estimate on Net Sales of Wearables for 2023
3-Year Products and Services Performance Projection
The table on the following page shows net sales by category for 2022, net sales estimates for
2023, 2024, and 2025 (dollars in millions):
58
Table 5.1 3-Year Products and Services Performance Projection
The table below consists of the cost of sales for 2022, projections for 2023, 2024, and 2025
were as follows (dollars in millions):
Table 5.2 3-Year Cost of Sales Projection
The table below consists of the actual operating expenses for 2022, projections for 2023, 2024,
and 2025 were as follows (dollars in millions):
Table 5.3 3-Year Operating Expenses Projection
Assumptions:
1) All sales by category other than Wearables would increase by 10% per year.
2) Sales of Wearables would increase by 27%.
3) Research and development would increase by 20% per year.
4) Selling, general and administrative would increase by 15% per year.
5) Cost of sales of products would increase by 10%, with a 5% increment from the
percentage of cost of sales in 2022 of 5%
6) Cost of sales of services would increase by 9%, with a 3% increment from the
percentage of cost of sales in 2022 of 6%.
59
Suppose Apple continues to significantly innovate and produce products and services
that meet the rising demand for such wearables, especially Apple Watch and AirPods. In that
case, it can be estimated, based on the two previous years’ annual reports, that the percentage
of net sales of Wearables can increase roughly by 27%. This means wearable products can
contribute 12% of the total net sales in the succeeding years. The table also shows an increase
of 2 percent from the 2022 sales of wearables of 10%. This is a good indication that the
recommended strategy will positively affect the company's sales. Assuming that the company
continues to make new products other than wearables, as part of the general strategy to
maintain its innovative product development and design thinking, there is an estimated 10%
increase in sales.
The cost of sales for products and services would increase by 10% and 9%,
respectively. These are based on the average percentage increase for 2020- 2022. Over the
past three years, the percentage of operating costs related to research and development
ranged from 16 to 20% (www.apple.com, n.d.). Suppose there is a significant development in
wearable products. In that case, the price for analysis and action may be assumed to increase
by 20%, with an increment of 3% from the 17% increase in 2022, taking the company to further
the development of products. The selling, general, and administrative expenses would increase
by 15%, with an assumed increment of 3% from 2022.
Apple Inc. finances its projects with a combination of debt and equity. Apple's debt-toequity ratio of 1.95 indicates it is more dependent on debt funding. According to the financial
ratios mentioned above, Apple also has a decline in its interest coverage ratio of 1.1%. These
findings may influence the company's decision to use equity financing to fund this product
development. The strategy's ability to expand profits annually may also result in more earnings
and dividends per share, which draw in more investors.
Apple's business began in the personal computer industry, but that is no longer its
primary focus. However, although the company's other products are still worthwhile, iPhones
have taken over as the company's main product line with 52% of the total income (Drury, 2023).
It is recommended that Apple improve its delivery time and supply chain for other products,
particularly iPad products. The data by www.asia.nikkei.com (2022) reveals that there are still
significant wait times in various Asian markets in the later period of 2021 and during 2022. For
instance, for Ipad products, customers in the Philippines could wait up to 63 days. The research
also shows that the average wait time for Malaysian customers is 54 days. This is due to supply
constraints www.asia.nikkei.com (2022).
iPads received little attention throughout 2022, and supplies were noticeably scarce. In
March 2022, Apple updated the iPad Air but did not add a new design, instead concentrating
on installing an M1 chip. No other iPads were updated in the fiscal year 2022 (Clover, 2022).
Although the iPad Pro and iPad 11-inch just received updates, due to the time of the launch,
which was in October 2022, those sales will be recorded in the first quarter of fiscal 2023. Apple
has repeatedly stated that the iPad has had supply challenges, which may have influenced
sales (Clover, 2022).
60
The iPad was the only component of Apple's business, with a decrease in net sales of
8% in the 2022 annual report compared to the net sales of the iPad in 2021. It is also noted that
the iPad was the lowest-generating product segment of Apple over the past three years until
the present. However, in the first quarter of 2023, Ipad sales grew by 30%, which is 9,396
(dollars in millions) from the previous year’s sales of 7,248 (dollars in millions) (www.apple.com,
2023). It was driven mainly by increased net sales of the iPad and iPad Air, which were released
just at the beginning of the 2023 quarter. Based on this data, it can be said that the sales have
increased due to the improving number of production of such products. With an increasing
demand for remote work solutions, Apple may take advantage of this potential by giving more
attention towards improving its supply chain through updating, adding, and securing stable
suppliers and sufficient plan of product deliveries to increase the supply of iPad goods.They
could also try to work and invest in various logistics and supply chain management software
programs to minimize delivery time. Companies might also consider spending money on
sophisticated software that offers real-time tracking and transportation data to fulfill the demand
for such products.
As of 2023, Apple currently has more than 522 Apple stores located across 25 different
nations (Campbell, 2023). However, this is far from one of its competitors, Samsung, with more
than 3,000 Samsung retail locations worldwide, which serves as the company's public face
(www.news.samsung.com, 2020). It can be recommended that Apple expands the reach of
its existing goods or services into existing regions to increase its sales. The Indian
economy, for instance, is growing and expanding quickly. India's market also offers a
sustainable setting as a developing country (www.companiesnext.com, 2023).
Furthermore, CEO Tim Cook revealed during the fourth quarter of 2022 earnings call
that iPhone sales from India brought Apple its highest-ever revenue. With India hitting an alltime revenue record "with an extreme double-digit rise in India," the iPhone maker reported
revenues of $90.1 billion for the September quarter (www.timesnownews.com, 2022). Aside
from the Apple online store in the country, it can take advantage of the growing demand for
Apple products by putting up a physical retail store.
5.5 Recommendations on Financial Performance
Apple is a multinational corporation with a sizable investor and consumer base
worldwide. The objective of the company, which is a publicly traded one, is to increase value
for the shareholders. Every business endeavor, including every good or service created or
provided, aims to advance the enterprise and maximize profits. Apple has made considerable
strides in generating shareholder value over the years. It is evident from the analysis of the
profitability, liquidity, activity, debt, and cash flow ratios that Apple has been operating profitably
for many years. By examining Apple's emergency preparedness, enterprise marketing
approach, capacity for innovation, and market share, the company can work on acquiring
sufficient liquid assets, as this could aid the company in settling its current liabilities. Aside from
that, the company can work on increasing its sales over the years. Considering the state of
being in the pandemic, the company might have to work on improving its profits and sales.
CHAPTER VI
CONCLUSION AND FUTURE OF THE ORGANIZATION
The findings of this audit reveal that Apple Inc. is well-positioned compared to its
competitors. However, areas for improvement can help the company maintain and enhance its
competitive advantage. With regards to competitive positioning, Apple scored the highest in the
Competitive Profile Matrix (CPM) with a weighted score of 3.50, followed by Samsung with a
score of 3.42, and Microsoft with a score of 3.20. The success in the market depends on other
factors, such as the overall economic environment, consumer preferences, technological
advancements, and the actions of competitors.
The External Factor Evaluation Matrix (EFE Matrix) assesses the company's
opportunities and threats in its external environment. The company needs to focus on mitigating
the impact of threats such as regulatory risks and dependence on third-party suppliers and
manufacturers while leveraging the opportunities, such as the growing popularity of the App
Store and digital services, and increasing demand for remote work solutions and electric
vehicles, to gain a competitive advantage in the market.
For Apple's goals, Apple should focus on becoming carbon neutral and reducing ewaste problems. It is also recommended that Apple expands the Self Service Repair program
and increases the number of authorized service providers to maintain clients and establish a
trustworthy brand image while generating additional revenue. Finally, Apple should continue to
focus on developing shareholder value and maximizing profits.
The IFE matrix is a tool for developing business plans that provide a summary of the
significant benefits and drawbacks in each functional area as well as an evaluation of the
relationships between those functional areas. Apple Inc. has a competitive edge due to its
thorough research and development and high-priced items. In its fiscal year 2022, Apple spent
a record 26.25 billion US dollars on R&D, up four billion from the previous year. However, its
pricing strategy is vulnerable due to high-earning people and consumers being more pricesensitive in developing nations. Apple's market share may be constrained by its premium
pricing. A total score of 2.88, higher than the industry average of 2.5, indicates that the
company's strengths can help mitigate the drawbacks.
In the light of the SWOT matrix, The SO and WO strategies aim to capitalize on the
company's existing assets and possibilities by developing innovative wearables technology,
growing into the market for electric vehicles, broadening their product offerings, and raising
consumers' awareness of their brand. The ST strategies focus on brand recognition, product
differentiation, and customer loyalty. The WT strategies address threats such as fierce rivalry
in the smartphone market, the need to comply with regulations, and cybersecurity.
Moreover, based on Apple's result on the IE matrix, a growth and build strategy is
recommended, which can be achieved through market development, product development, and
market penetration strategies. Apple's success in creating new and innovative products in
62
response to customer demand has been a critical factor in its growth, and expanding into new
markets such as Africa and Indonesia could provide further opportunities for growth. Market
penetration can also be pursued by increasing product sales through various platforms. Overall,
the IE Matrix offers valuable insights into Apple's strategic position and potential avenues for
growth.
Apple's success is due to design thought, innovation, and market opportunity. Apple's
most appealing option is to keep its innovative design thinking and product development, which
scored 5.32 in the QSPM. This plan addresses increased demand for wearables technology
and accessories, severe smartphone market competition, and rigorous research and
development. Apple's vision has been innovated by design thinking, which encourages critical
thinking and innovation.
In conclusion, the findings of this strategic management audit suggest that Apple Inc.
is well-positioned in the technology industry. However, there are areas for improvement to
maintain and enhance its competitive advantage. The proposed recommendations can help
Apple mitigate its weaknesses and external risks and achieve its vision and mission while
maximizing profits. To reduce the impact of these risks, Apple should continue diversifying its
manufacturing base and establishing solid relationships with key suppliers. The company can
also work towards improving its brand image through sustainable practices, increased
transparency, and community engagement.
Based on the findings and recommendations of the strategic management audit, it is
clear that Apple Inc. should focus on leveraging its strengths, mitigating its weaknesses, and
taking advantage of emerging opportunities to remain competitive in the technology industry.
The company should prioritize innovation, sustainability, and customer satisfaction in its vision
and mission statements and establish clear goals and strategies to achieve these objectives.
Additionally, the company should continue to invest in research and development, expand its
Self Service Repair program, and diversify its manufacturing base to mitigate the impact of
external risks. By taking these actions, Apple can continue to deliver innovative products and
services that meet the evolving needs of consumers while mitigating the risks and challenges
that can impact its business.
63
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69
APPENDICES
Appendix A. Consolidated statements of operations
70
Appendix B. Consolidated balance sheets
71
Appendix C. Consolidated statements of shareholders’ equity
72
Appendix D. Consolidated statements of cash flows
73
Appendix E. 2022 apple products and service performance
74
Appendix F. 2021 apple products and service performance
75
Appendix G. 3- year operating expenses of apple
76
CURRICULUM VITAE
Christine Grace D. Suazo
Telaje, Tandag City, Surigao del Sur
0945 311 5602
cggsuazo@addu.edu.ph
EDUCATION
Ateneo de Davao University
Tertiary
Bachelor of Science in Accountancy
2019 - Present
Saint Theresa College of Tandag, Inc.
Senior High School
Accountancy, Business, and Management
2017 - 2019
RELEVANT EXPERIENCE/S
Intern
Geralde - Gales Accounting and Auditing Office
2022
City Lay Coordinator
Parish Pastoral Council for Responsible Voting (PPCRV)
Tandag City, Surigao del Sur
2022 Elections
77
CURRICULUM VITAE
Mary Dania Sullano
Purisima Pob.,Tago, Surigao del Sur
0999 965 7929
mdlsullano@addu.edu.ph
EDUCATION
Ateneo de Davao University
Tertiary
Bachelor of Science in Accountancy
2019 - Present
Ateneo de Davao University
Senior High School
Accountancy, Business, and Management
2017 - 2019
RELEVANT EXPERIENCE/S
Intern
DepEd Division of Surigao del Sur - Accounting Department
2022
78
CURRICULUM VITAE
Louise Dianne Paullete E. Tapanan
San Francisco St., Bankerohan Davao City
0995 966 1854
ldpetapanan@addu.edu.ph
EDUCATION
Ateneo de Davao University
Tertiary
Bachelor of Science in Accountancy
2019 - Present
Ateneo de Davao Senior High School
Senior High School
Accountancy, Business, and Management
2017 - 2019
RELEVANT EXPERIENCE/S
Customer Service Representative
Awesome OS
2022-2023
Loan Staff
On-the-Job Training
Income Credit Cooperative
2022
Front Desk Clerk
On-the-Job Training
Income Credit Cooperative
2022
Bookkeeper
On-the-Job Training
Income Credit Cooperative
2022
79
CURRICULUM VITAE
Marion James T. Tarnate
R. Castillo, Davao City
0948 636 2940
mjttarnate@addu.edu.ph
EDUCATION
Ateneo de Davao University
Tertiary
Bachelor of Science in Accountancy
2019 - Present
San Pedro College
Senior High School
Accountancy, Business, and Management
2017 - 2019
RELEVANT EXPERIENCE/S
Intern
Johndorf Ventures Corporation
2022
President
Pinag-Isang Lakas ng Samahan ng mga Progresibong Atenista
2022 - 2023
Treasurer
Samahan ng mga Mag-Aaral ng Pamantasang Ateneo de Davao
2021 - 2022
Treasurer
General Assembly of Class Presidents
2019 - 2020
80
CURRICULUM VITAE
Ville Margareth D. Tinnae
Don Luis Village, Mati City
0976 094 4241
vmdtinnae@addu.edu.ph
EDUCATION
Ateneo de Davao University
Tertiary
Bachelor of Science in Accountancy
2019 - Present
Immaculate Heart of Mary Academy
Senior High School
Accountancy, Business, and Management
2017 - 2019
RELEVANT EXPERIENCE/S
Assurance Intern (MG4: Power & Utilities)
Sycip, Gorres, Velayo (SGV) & Co.
2022 - Present
Facilitator
Ateneo First Year Onboarding Program (AFYOP)
2022 - Present
Vice President
Accountancy Students’ Scholastic Events and Tutorial Support (ASSETS)
2021 - 2022
Junior Communications Head
Accountancy Students’ Scholastic Events and Tutorial Support (ASSETS)
2020 - 2021
81
CURRICULUM VITAE
Angela Beatrix F. Tiu
82 Villamor St., Bo. Obrero, Davao City
0917 536 8010
abftiu@addu.edu.ph
EDUCATION
Ateneo de Davao University
Tertiary
Bachelor of Science in Accountancy
2019 - Present
Stella Maris Academy of Davao
Senior High School
Accountancy, Business, and Management
2017 - 2019
RELEVANT EXPERIENCE/S
Intern
Johndorf Ventures Corporation
2022
Secretary-General
Accountancy Student Executive Council
2022 - 2023
Awards Regulatory Director
Council of Organizations of the Ateneo - Davao
2022 - 2023
Vice-President for Productions
Junior Philippine Institute of Accountants - AdDU Local Chapter
2022 - 2023
Treasurer
SAMAHAN Logistics Department
2022 - 2023
Batch 33 Representative
Pinag-isang Lakas ng Samahan ng mga Progresibong Atenista
2022 - 2023