Transcript:
Next couple minutes you better hang on to your seat seriously especially people who love Apple we’re gonna need your people who would have been kind of on their laptop if you can do me a big favor just for the next couple minutes just close it for me especially if you don’t have an Apple any better but I really want to pay attention because we’re you’re gonna get out of this presentation or who has worked very hard in putting this together and you’re gonna get a lot of battle back some of the tips you never know you might walk out of this classroom go buy some Apple stock and become very rich man so I really hope okay just by a show of hands who here is a parent I just want to any parents in the house just professor so we got one father but for the next for the next a couple minutes I just want you to close your eyes and pretend you’re a father so now that you are in that parent mindset this is your kid right there right you can see this child you’ve taken care of this kid sement it grow up and you hold them very dear to your heart you invest in tons of money and in the child because you know there are expensive and you’ve done the best that you can with the resources that you have and now you have a happy family you have things are going well you’re you’re financially stable but you know you’re starting to realize wow a couple of these things I can do better and I don’t have that expertise quite yet so let me seek elsewhere let me maybe hire a babysitter right and bring that babysitter in to take care of my my child but then it all goes away and this babysitter leaves you asked they start monopolizing your family they start acting like this is their child and before you know it boom you’re out the door you sell all your belongings family picture as sounds pretty pretty bad right sounds pretty well that’s exactly what happened to our friend Steve Jobs over at Apple see back in 1983 he tapped into John scub John Sculley was CEO Pepsi making tons of money but you know what Steve Jobs just walked up to him and with his charisma he told him this famous line right here he says John do you want to spend the rest of your you want to spend the rest of your life selling sugared water or do you want to get that chance to change and with that John Sculley left pep left Pepsi and went over to Matt and just like that babies do the right talking about her take for Steve Jobs out the door and Steve Jobs walked out with only one share of that Apple so this is just one of the stories and Steve Jobs and Apple are very into wine and it’s it’s very important to pay attention but this is just a little piece of the struggles that Apple has come has gone to to get to where it’s at today so with that in 1992 more problems came and that babysitter story I told you about was just one part of it so with that I’ll pass it on to you it’s gonna share more about some of those problems good evening everyone on January 20 23 2006 Apple announced an internal probe uncovered uncovering irregularities related to the company’s issuance of stock options granted between 1997 and 2001 when its shares fell 3% the internal probe resulted in examining more than 650,000 emails documents and interviews of more than 20 current and former employees directors and advisers of Apple on august 2 2nd 2006 management announced that the company would likely need to restate earnings and delayed filing its quarterly SEC report 10-q because of additional irregularities the company found in its accounting structure and because of this announcement Apple stock fell another 6.6 percent as of November 12 2006 the company had not yet found complete required financial statements or second tentative reports for the third and fourth quarters of the year now because Apple has not found their quarterly report they were worn by Nasdaq that there could be a possible D lessening of their stocks other problems aside from the stock option investigation and possibility listing from Nasdaq August 30 2006 if a French law was forcing Apple computer to its iPod player and iTunes online store to be compatible with rival offerings August 24th 2006 – management announced the recap of 1.8 million laptop batteries October 21st 2006 the RealPlayer Music Store announced that it was introducing a new product called harmony that would let customers download music from the real player online store and allow them to use it on any portable music player harmony can pose as a potential threat to Apple’s iTunes Store because this opens the door to Apple’s iPad music player competitors talk about the current key financial ratios of Apple they start within their market that is the same that net revenue as we can see on the graph over the years is meaning quiz and then we have the asset turnover that show the company has been more effective in using investment in fixed actually to generate revenues it’s also going up then we have the return on assets where it’s the amount of revenue that the company is able to generate from each dollar of assets then we have the financial leverage which is the degree to which the businesses is new to license borrow borrow money over those years the company is running 1.4 times from the total assets then we have to return on equity which measures how efficient our company is at earning at isn’t the church oldest money it’s the same thing which is going up over the years the K just goes up to 2000 Simpa 2006 by this is rice innovation then we have the returning that’s capital that is all the same thing is just going up this is really good yeah when you think about what you think of Steve Jobs so just some of the facts about him he was born February 25th 1955 he was actually adopted in the same month that he was born by Paul and Sarah Jobs he graduated high school in Los Altos California and he enrolled in Reed College where he dropped out after just one semester there’s where he met Steve Wozniak seven years his elder he met with her friend Steve Wozniak she was very much into little gadgets and everything together they designed and built the first prototype computer and even Apple won with that success they founded Apple computer company Steve Jobs and Steve Wozniak there’s also kind of like a ghost founder it was Ron Wayne he actually he acted at as the adult supervisor for them as they were making the company okay now there’s seven members in the board of directors tang executives and there are average ages in the board of directors is fifty nine point four two these are some of the pictures of the board directors here we have Bill Campbell whether direct or Al Gore jobs and some things one of the privileges for working at Apple the original board members received $50,000 and as an annual retainer they also are eligible to receive up to two free computer systems and they also get discounts on additional products that they and on the 4th anniversary for joining the board they’re entitled to receive 30,000 shares of stock and these are some of the executives the external environment for sit outside an organization that are not typically within the short-run control of top management comprises the definition of a firm’s external environment I have two tasks at hand folks number one I will analyze the remote environment including the economic technological societal and the legal and political environment of the external environment available second I will analyze apples test environmental sources using Porter’s analysis apples economic external environment created challenges that were difficult but not impossible to overcome remember this is back in 2006 number one the economy was slowing down no six job growth fell and the raising debt payments on record date debt were also happening with all this taken into consideration Apple still had the highest Mac sales in company history and their iPods were actually increasing in sales way more than were expected even with these hardships in place Apple’s technological environment was also on the move singular was teaming up with Napster spiral frog on if you’ve ever heard of spiral frog music deal which is on the internet also was starting up Apple had a meeting with all of its executives and it stopped able to decide what they were gonna do about it they decided that it wasn’t a huge threat and ended up being right and they decided to continue on Apple societal and external environment I don’t know if you remember back in 2006 that you know Microsoft was the cool company they’re the ones that had everything they’re the ones that started that computer business more or less with Windows and all that I was starting to shift Apple was starting to become the company which it kind of remains today Microsoft is definitely going down in that that was a big ship 2006 was a big year for Apple in that regard Apple’s political legal external environment that was a bit more concerning my buddy each right:0 was talking about this earlier Dell which was our biggest competitor they actually had four point 1 million batteries recalled Apple had 1.8 million batteries recalled in 2008 or 2006 January 3rd 2006 there’s an internal probe because of irregularities on Apple’s balance sheet well after an investigation I’ll explain what happened with that but that was not good also Nasdaq threatened d-list Apple from the from the list for not filing their third report these two the last two things that I stated those actually threatened Apple’s entire existence well what ended up happening as nothing happened the irregularities ended up while there were couple rig irregularities Apple never benefit benefited from them so they kind of dropped the case and they ended up handing in the third quarter review so that was also they were never delisted so they were able to overcome that adversity now it is my job I’m going to explain the Porter’s five forces in regards to Apple and the ones the threat of entry of the new competitors the main competitors and oh six with Apple Dell I had 32 percent market share HP had 23 percent gateway had six point four percent we were in the middle of gate Wayne Toshiba which had five point one percent the threat of substitute products and services was also part number two where Apple had 77 percent market share on the iPods that we were selling which was the biggest thing that we were making the most money on where Sun disk and remember heard of that had 10% and then Zune from Microsoft I’ve never heard of they vary a little bit but then to become obsolete after that three and four the bargaining power of customers and suppliers respectively this is someone important because customers and Matt’s numbers can kind of dictate the price of things if something is too expensive customers can use their dollar votes and not buy the thing if they’re it’s really really cheap they can use it but they’re not going to be able to have that much of a profit market so you want to have you know sell your things in a way that customers are gonna buy them but also in a way that it’s not too expensive to where they won’t as well what happened is Apple ended up pricing their their things to the customer it’s a little more expensive but I think the customers feel like it’s worth it because apples products are a little better than most so it was worth it now suppliers is a similar similar situation Apple chooses whether or not the suppliers raw materials are worth it or not if the suppliers raw materials are too expensive they don’t get it they go to other people for raw materials where they can kind of bargain with the price not last is the intensity of the competitive rivalry the stipulates the level of advertising marketing and innovations that firms are going to use there’s not a whole lot of competition they obviously don’t have to use that much money but back in 2006 it was a huge time with a competition it was pretty much as it is today although Apple situation day is better than back then but it was definitely a huge huge thing and they were spent for him for spending millions and millions of dollars on that okay so in regards to the internal environment and internal strategy Apple u2 a resource-based view of strategy which emphasizes the internal capabilities of the organization and formulating strategy to help gain a competitive advantage in other words Apple has the capabilities to configure and reconfigure itself to move with the rapidly changing environment their ability to innovate successfully is a distinctive capability which has proven very effective and as you can see studies show that they are unrivaled in innovation and product design Apple’s objective according to a Steve Jobs was this digital hub which was going to move the organization into the future the digital hub kind of targets all the technical logical devices which include iPods DVD player CDs you name it Apple is the only computer company that controls and designs the development of the entire personal computer and their products are known for their innovative industrial design intuitive ease of use and built-in network graphics and multimedia capabilities Apple is corresponding to the rapidly changing environment and this makes them very adaptable to change and moving into the corporate culture aside from being adaptable to change their culture is very open and individualistic they encourage self-expression and creativity and they see that as a competitive advantage and they’re relatively casual and direct contact with managers allows the workers to work together to solve strategic issues another core competency of Apple Corporation is that they have a very expanded distribution market where they have stores where people can and they are in highly traffic locations and you can go in and so you go in and you look at the computer and you’re able to play around with it and you also have a knowledgeable employee speaking to you about the computer and in regards to strengths and weaknesses I’ll turn it over to Michelle well the SWOT analysis apples strengths are the following brand awareness apple maintains an aggressive campaign for high quality through marketing and engineering efforts second is reputation for quality the strong capability in basic research Apple continues to develop new products and technology to enhance existing products in the areas of hardware peripherals system software you name it another strength would have to be the experience top management jobs led Apple back to the future implemented the new direction to lead the company to success as my fellow members have been men have mentioned another strengths will have to be their extended distribution channels so this products worldwide through the online stores its retail stores its direct sales force and third-party wholesalers resellers and value-added resellers another strengths will have to be their knowledgeable customer service which is a common which is a strong there is a strong emphasis on this sort of customer service throughout the company because Apple believes a high quality buying experience with knowledgeable salesperson and convey the value of the company’s products was crucial to the company’s success now for the weaknesses unfortunately Apple has maintains a low international market share at this point Apple’s Worldwide shares did not place it among the top selling PCs such as HP or itself another weakness would have to be that Apple follows a differentiation strategy in which product and mobility is high and the strategy is not easy to sustain another weakness is that the company is susceptible to changes in foreign currencies exchange rate fluctuations and international trade regulations margins on sales on the company’s products in foreign countries that included components obtained by the foreign suppliers could be adversely affected with this currency change another weakness would have to be the lack of community service up efforts as of now really Apple hasn’t engaged in much community service compared to other companies opportunities while Apple has the opportunity to develop its iTunes and music player technology into a mobile phone format as we’ve seen singular is approaching a similar strategy with joining Napster we also have new products with the use of wireless technology Apple had the opportunity to leap into the wireless industry in order to provide for greater performance range and improved reliability another opportunity would have to be the entrance into the entertainment industry Apple has the opportunity to do with the entertainment industry what it did with industry with the iPod with the iTunes music store another possibility would have to be the possibility with opportunity to have to be the possibility with the Beatles which may give Apple Computer iTunes and exclusive to their recordings threats Apple is subject to aggressive pricing it of course has increased competition with some more products it innovates it has a high product substitution effect and the entertainment industry because of what happened with the music industry is strongly avoiding what we can do with the entertainment industry and of course Steve Jobs helped he was diagnosed with pancreatic cancer in 2004 there’s an app to deal with the pancreatic cancer that actually the son taken away yeah alright so this is uh as consultants we took a look at all the problems facing Apple at this time and we gave them some some real good advice so with what’s happened during this time is that they when Steve Jobs went out on his own he actually started another computer company called NEX Apple acquired this company for four hundred and two million dollars and doing so acquired Steve Jobs back as a CEO and with that leadership CEO entered the new phase or Apple into the new phase of its growth and development vertical growth Apple stores can now be seen anywhere right we have them in Aventura have them in all types of malls these these stores have been a great injection of wealth into Apple’s business model and that will continue to grow in the years to come next outsourcing Apple is able to really have high profit margins because they’re able to outsource and control very tightly how they outsource so that’s been a great blessing for them horizontal growth they’re very in control of how you get your music right you buy and I automatically you have to download iTunes in order to access that so now they give you a platform and they’re in control of how you get to buy your music and they’re making money off each song that you download so what’s next rap right I ask that question to you and it could be of Amazings but I foresee growth in the bricks we are taking a look at Brazil Russia India China massive potential in the Chinese market especially currently we have 307 million we look at China they have two point four billion expected or I’m sorry 1.3 billion people so a huge market and that’s been that hasn’t been leveraged because if you look at the stores that they’re opening currently in China I only have four stores compared to the 236 the United States so as you can see there are taking that they’re taking that initiative already and scheduled to open many stores in China so this is kind of working for see happening lots of growth internationally for Apple next is the imitation of the product we see a lot of Apple knockoff specially or imitators are coming after that same market share with the Android Market so in order to avoid that that competition Apple needs to continue to deal with their do what they do very well which is innovate and come up with new products new high pads iPhones etc so keep that investment up in R&D we need a next big hit or hopefully as they’ve had in the past so we have we need to ward off and they’re doing that with the iCloud coming up great a great new product launch for for Apple so they’re there currently they currently have several products as a pipeline and they have to continue to expand partnerships with Verizon when Verizon opened up that was a huge boost for iPhone sales so they need to continue doing creating strategic partnerships not just domestically but internationally and especially in Hollywood but there’s a huge potential to make money off DVD or movie streaming and downloads so this is kind of showing you that over the past couple months iPhone subscribers have been declining but there’s room especially for next slide this is room especially in the enterprise a lot of people are getting off BlackBerry’s so one of our recommendation is to tell Apple hey why not launch products specifically for that user demographic that is I mean blackberry and focus more on the enterprisers huge growth and potential error my Community Services has been one of the bad PR moments for Apple so we are recommending that they change that around increase a lot of the involvement in the community that’s great for PR you’re going to benefit tons of marketing and awareness and that’s the right thing to do right and as a company you want to do the right thing so we want Apple to show its people up right and the way that we’re recommending that they do that is by opening up apple computer centers in the inner cities and why not reach out to those students that really love music love maybe play together videos and give them the equipment and you start you start creating Apple fans at a very early age which will lead to a higher value for that customer and we see it now in college right you look around most college campuses there’s more Apple products and usually when you convert at the college age they’re probably going to be a lifetime Apple customer when you go into business and you become a CEO of the business that’s probably where you’re going to use the radical organization so you want to start them young and it’s great as well for the community so those are some of our ideas and we also got very creative and see where we see Apple in five years where are we what direction are we heading in are we gonna see the eye board come out or maybe the iMac in 2014 or maybe an iPhone the wristwatches is coming up next or the eye bangle but but you know once you create a customer from the beginning you’re really an Apple customer all the way to the end so thank you very much you pretty much you start off you’re aware of the company you’re aware of what it does what it produces but you don’t know the financials you don’t know the ups and downs the strengths and weaknesses of the actual company something that was you know upsetting but it’s something that you know me suggest is the giving back to the community something that Apple hasn’t done which if you compare it to other companies other companies are at reaching out and something that oh okay now stores a lot of the products themselves the little pieces that make up the iPhone but they also control that very tightly to make sure that the quality is up and they have huge profit margin it’s not just a friend oh yeah and iPod and pretty much
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