Apple Team Case Analysis

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Some of the strengths that Apple could build upon include its reputation, a highly developed research and development department and a very strong financial position. Though their reputation is somewhat changing, Apple is still seen as one of, if not the premier personal technology company in the world. Under Steve Jobs, the goal was always to make the best out of existing technologies and sell it at a price that would always be profitable. Recently, Apple’s reputation is changing to one which is relying on their successful products and innovating on those, rather than following the trend of technologies. Because of Apple’s history of innovation, they have a highly developed R&D section. Apple spends more money on R&D than the market averages already, so they are in a good position to continue to lead in innovation. With billions in Cash and Equivalents and billions more in Short-Term Marketable Securities, Apple has an unprecedented financial strength. This puts them in position to weather economic crises and continue to develop their product during times when the competition may have to stall R&D to focus resources on core products. Even though Apple already spends above average on R&D, when they are ready to come out with the next best thing, they will be a good position to do so financially.

Most of the weaknesses Apple is facing deals with the resignation and passing of Steve Jobs. While Tim Cook is certainly as dedicated to Apple as Steve Jobs was, there seems to be something lacking in the part of vision and the perception of enthusiasm that Jobs carried with him. Cook has his own managerial style, which seems to be more democratic than Jobs’s autocracy. It is probably better that Cook is following his own managerial intuitions than trying to force a continued Steve Jobs legacy. However, it seems that the make-it-best-and-sell-it-for-more strategy, is being traded for a strengthen-the-haunches-we-sit-upon strategy.

One example of that is the introduction of the Apple Watch. Apple’s most recent independent innovation was the Apple Watch and although the it topped the charts for wearable technology, it was not as successful as hoped. It did not introduce much by way of new technology, it simply changed the way the same technology was presented. Cook is the former COO of Apple and his vision, much like Robert McDonald of Proctor and Gamble, is focused on improving what Apple is already doing. Steve Jobs was not so steeply involved in operations before taking the role of CEO of Apple, and perhaps that is why he was able to foster such a forward-looking vision. It seems that the biggest internal weakness that Apple is facing is in its self-perception of its own identity under the leadership of Tim Cook.

The central problem in the case was that Steve Jobs was the CEO, board member, and visionary of Apple when they released some of their most influential products. When Steve Jobs passed away in 2011, Apple named Tim Cook as CEO, which made many people wonder if a company that tied their innovation, inspiration, and vision to Steve Jobs could continue to sustain its rapid growth. While trying to prove the critics wrong it seemed Tim Cook was starting to steer the company away from what they do best, analyze the market and innovate. Apple proudly admits they are never the first to market, but instead analyze each market and consumers needs and then design products that were more attractive to users. but now it seems they are stuck in the same spot. Another problem in the case is their inability to grow iPhone sales in the Asian market. Apple’s iPhone is to expensive in countries like China making it hard for them to compete local brands such as Nokia.

Although Apple is struggling to find new innovative ideas, they have continued to succeed financially. In 2015, under CEO Cook, Apple was the most valuable company in the world but competitors such as Microsoft are still on their heels. However, Apple still outperformed them in many key ratios in short-term solvency, asset management, profitability, and market value measures. For example, when we analyze the debt to equity ratio, we see that Apple is at .68 and Microsoft is at .75. This shows that Apple finances their assets with more equity compared to Microsoft, making Microsoft risky. We can also see that Apple is managing their assets more efficiently then Microsoft by looking at the inventory turnover ratio. Apple turns its inventory over 47 more times than Microsoft. Apple profit margins are 1.5% higher than Microsoft meaning they generate $1.50 more profit for every dollar of sales. And last, but not least, Apples earnings per share is a staggering $6.17 higher than Microsoft.

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Apples vision, as stated by Tim Cook, “We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self- honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.”

In 2017 Tim Cook implemented a new mission statement for Apple. In a press conference, Tim Cook stated, “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad.” In the same interview he stated their objective, “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 business-level strategy Apple currently uses is a broad scope that serves multiple customer segments with its multiple product categories. They offer a superior product with a modern and elegant design that consumers do not mind paying a premium price for. They offer these elegantly designed products in many different categories such as computers, smartphones, portale music players, and tablet computers.

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