Financial analysis of Apple Company Term Paper (Term Paper Sample)

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Financial analysis of Apple Company
a. Company Overview
Apple Company manufactures computer software and hardware and produces and designs computer devices, cellular and portable music garget. Apple is known globally for its ability of innovation in the telecommunication industry and its potential of selling its goods through the brand and the marketing plans (Apple Inc).
Product Overview
The company in known for selling the products of high value and are integrated across the computer industry .Apple has managed to gain consumers attention unlike its competitors. The plan helps the company in connecting the consumer appeal to its name and helps in the creation of the loyalty that keeps the company going. The company further sells its content to the online stores such as the iTunes and is globally known for the production of devices like iPod, phone, OS X and the iOS as well the iCloud (Apple Inc).
The products of the company are mixed with research and development R&D and have been proven to work efficiently but some ratios have shown that the company’s performance is decreasing slowly. Apple has several opportunities’ for growth such as creation of innovative devices like Apple T.V and iWatch which are still under research and once they have been developed they will be distributed in the market for consumer consumption. However, despite the tremendous growth enjoyed by the company, it experiences stiff competition in the industry (Apple Inc).
Competitive Overview
Samsung is a digital agency that gives numerous products including residence appliances ,computers , mobile and domestic audio (Mergent Inc). Samsung merchandise is normally priced better than the everyday competition inside the electronic industry known for its satisfactory and reliable logo. The logo’s Smartphone, galaxy s6 retail rate is $680, higher than the iphone 6. Although Samsung is an global company founded in south Korea, it stocks similar distribution approach like apple having their personal retail stores, on-line retail store, and distributes its products to diverse retailers like Wal-mart, costco, first-class purchase, and different international retailers. Samsung’s marketing slogan “believe” stands proud as to asking its clients to envision what the brand can do for them. Seeing how they offer a huge style of electronic merchandise, it is hard for purchasers to put Samsung as a Smartphone organization, so that they do no longer painting the same emblem vision as apple does.
Samsung has posed a greater threat to apple’s products in the market. Samsung sells superior products and at affordable prices of similar goods to those of Apple hence customers has started diverting their attention from Apple’s product to the Samsung in the market thus is a major blow to the Apple which has been for quite some for producing only super electronics items in the market. On the hand the company also faces competition from the Microsoft which is producing software’s that are compatible with Mac hardware’s (Apple Inc).
Microsoft is also partnering with other companies in the industry to create alliances, therefore, for apple to remain competitive it needs to broaden its horizons so as to continue maintain financial stability. To remain competitive in this industry which is growing Apple needs to focus on lower end of the market that accounts for poor economic conditions. The company also needs to steer its market towards becoming the global market. The company should also enhance its devices compatibility so that consumers can install different software’s just as they do for windows devices. Innovation should be at their interest (Hoover Inc).
b.Corporate Strategy
When covering Apple’s Strategic plan, it's far crucial to first discover the corporation’s project and imaginative and prescient statement. Apple’s past and future corporate strategy is classified into the product design and differentiation. The company has focused in developing online stores in line with its third party distribution network to efficiently and effectively access more clients and offer them with high quality sales services and after sales’ services. The company continues to diverse its business platform through innovation and the delivery of the third party digital applications and content implications via iTune online stores. Additionally the company also utilizes intensive global market growth as a corporate strategy (Apple Inc).
Past Strategy
Comparing the iPhone to its competitors, the iPhone is the only smartphone that has the Apple Pay capability. The ability to substitute any credit card and make a purchase on the phone itself satisfies many consumers because they can just simply leave the house with their phone to go shopping. With its iOS 8 operating system, the phone also records your health history and organizing your life seamlessly. The iPhones is marketed as “bigger than better” because there is more than just its size.
Pricing Strategy: Apple uses a market skimming strategy method for the iPhone 6 and 6 Plus. Currently, the iPhone 6 with the smallest memory capacity of 16 GB is priced at $650 and the iPhone 6 Plus with 16 GB is $750, which is $100-200 more than the previous iPhone generation. Although the product is priced higher than before, Apple consumers see the value behind the extra $100. The exterior design of the phone is extravagantly beautiful while simple and clean. The features of the iPhone improved and upgraded to be better than its previous generation. Because of the higher price, Apple has increased its market share along the way.
The iPhone offers memory storage in 16 GB, 64 GB, and 128 GB.As the memory storage capacity increase, the price increases by $100 each. That would be a value-added pricing method because of bigger size and better functionalities. But once Apple announces a new release of its next upcoming iPhone, they would allow third party retailers to be able to sell their inventories for a discounted price to clear out the space for the new arrivals of the next iPhones.
Promotion strategy consists of the advertising strategy. With the iPhones, Apple advertises in simplest form describing that there are two different sizes of the iPhone 6 and 6 Plus. Although Apple does advertise, it is not necessary. It is called advertising through word of mouth, because there are many Apple fans throughout the entire world, Apple-lovers share the latest news and information to each other through social media and blogs about Apple’s latest updates and arrivals. Many Apply fans take it to themselves to help Apple advertise by explaining the new phone in a consumer’s perspective through social media and word of mouth thus increasing other consumers’ interests.
According to Dr. Debajani Sahoo, Apple’s advertising campaign has one goal in mind, which is to make consumers fall in love with their products by being entertaining and memorable (Sahoo p. 43). Apple advertises on magazines just simply with some beautiful pictures with captions stating it was taken with an iPhone 6 to display the crisp and HD quality with its iSight camera. Apple maintains its advertising motto of keeping things simple and allowing the consumers to think and imagine while wondering what more can the iPhone do. Apple also relies on social media like YouTube to share video advertisements while hoping it would become viral. The best sort of advertisement is product placement. In each Apple product package, there are two Apple logo stickers. Typically, consumers would stick them onto their car window or on their computers somewhere, displaying the brand to the public and bringing more brand awareness when others see the logo.
Apple does not rely on personal sales let alone push or persuade their consumers to make a purchase through hard selling. They provide a relaxing and carefree space to roam around in its retail stores to build a lasting relationship. Consumers walking into an Apple store can also just simply ask questions about a new product without feeling pressured to make a purchase and even fix their broken products. The Apple staffs are there mainly to answer questions and assist as needed. Through its retail stores, consumers are able to learn more about the Apple brand and true meaning behind it. Apple wants consumers to go through the entire experience from walking into the store to the purchasing and opening the box. Each activity should be an experience of its own while leaving a remarkable impression on the consumers’ minds.
Future strategy
Apple will also train its sales force, preparing them for the release of the iPhones, what are the advantages and disadvantages of the new features as well as what consumers should expect of the new iPhone. Official press release will be made to announce as well as promoting the new iPhones. Apple will release commercials and advertising the new iPhone, focusing on the beautiful design and features that iPhone 6 and 6 Plus have. Apple would allow the option of pre-ordering the iPhones before its release date so the Apple fans can get their hands on them as soon as possible.
Apple would redecorate their retail stores to display the new iPhones for their window ads. Third party retailers would have posters of the new iPhones on their walls to increase exposure the products to consumers. Apple would announce the new feature of Apple Pay, exclusively on iPhone 6 and 6 Plus, as well as Apple accessories compatible with the new iPhones sizes. Apple will begin to distribute the new iPhones globally, first targeting China and 68 more countries by the end of the month with the goal of over 100 countries by the end of the year.
c. Company Performance in the Previ...