Apple Inc Business Analysis - Essay Example

? Apple Inc. Business Analysis The paper analyses the business operations of Apple especially on how it deals with changing economic conditions. The paper analyses how the recent economic trends are affecting the business operations of Apple. The paper explains the strategies the company is using, or it used to address the changing economics, and the tactics the company used to ensure successful implementation of business strategies and achievement of strategic goals. The role of human resource management in the achievement of business goals of a company are also expounded in detail. The reasons of investing as mutual fund manager in Apple are given, and the paper concludes with a summary of the business analysis. Apple Inc. Business Analysis. Company Background. Apple was incorporated in California in 1977. Apple Inc. and its subsidiaries develop, manufactures and sells its products including personal computers, media devices, mobiles, and digital music players. The Company also sells various related software, peripherals, services, networking solutions, and third party digital content and applications. Apple products and services comprise of iPod, iPhone, Mac, Apple TV, Mac, a portfolio of professional and consumer software applications, iCloud, the Mac OS X and iOS operating systems, and a variety of accessory, service and support offerings. The Company also sells and delivers digital content and applications through the App Store, iBookstore, iTunes Store, and Mac App Store. The company sells its products globally through its online stores, retail stores, and direct sales force, as well as through third-party cellular network transporters, retailers, value added resellers and wholesalers. Also, the Company sells various third-party iPod, iPhone, Mac, and iPod compatible products, including printers, application software, storage devices, headphones, speakers, and various other peripherals and accessories, through its retail and online stores. Apple sells its products to consumers, education, small and medium sized businesses, enterprise and government customers (www.apple.com). The Effects of Recent Economic Trends on Apple’s Business. The performance and operations of Apple depend significantly on global economic conditions. Uncertainty about worldwide economic conditions poses a risk as businesses and consumers postpone spending in response to unemployment, tighter credit, negative financial news and/or declines in asset values or income, which could have negative effects on demand for companies’ services and products (Andreas, 2011). The Company usually increases prices on goods and services sold outside the United States; this is aimed to offset the effect of appreciating U.S. dollar in these markets, thus affecting the demand of Apple products. Other factors that affect the demand of Apple products and services include; conditions in the mortgage and real estate markets, increases in fuel and energy costs, labor and healthcare costs, unemployment, access to credit, and other macroeconomic factors affecting the spending behavior of consumers. Andreas (2011) notes that the global financial crisis and the debt crisis in Europe have led to new or incremental tightening of the credit market, low liquidity, and extreme volatility in fixed income, currency, credit, and equity markets. This has affected the Company’s business, including the financial instability of outsourcing trading partners or their inability to obtain credit to finance development and/or manufacture products resulting to product delays. The crisis has also, has affected Apple customers, including channel partners by making them incapable to access credit to finance purchases of Apple products. Strategies of Adapting to Changing Economic Conditions. Economic recession provides opportunities to companies of starting new businesses, innovate and manufacture new products, and build and strengthen customer loyalty (Andreas, 2011). Apple operates in a highly competitive and highly volatile industry, therefore, to remain competitive the company continually introduces new services and technologies, products, enhance existing services and products, and effectively stimulate the customer demand for new and upgraded products. Apple continually invests in research and development thereby enabling it to design and develop new products and enhance the existing products. Apple invests heavily in marketing and advertising to promote the sale of innovative products and technologies. Apple embarks on expansion of its distribution network to enlarge its customer base, thereby providing customers with high quality sales and post sales services. The Company’s opens and operates its own retail stores in high-traffic areas, in urban shopping districts and quality shopping malls. Locating these retail stores in high-traffic locations enables Apple to ensure a high quality consumer buying experience and lure new customers. Apple believes in the provision of direct contact with its customers as an effective approach to demonstrate the benefits of its products and services over those of competitors. When Apple is determining the price of its products it uses a demand oriented pricing approach, it weighs the factor that affects customer preferences and tastes more than the factors such as profit, cost, and competition in determining the price level (Yukari, & Ian, 2011). Tactics of Achieving Strategic Goals. Most organizations summarize their strategic objectives through their mission, vision, and values statements. During the formulation, of the business strategies companies’ chooses tools that will help in the achievement of strategic goals. Numerous organizations use the following tactics to achieve their strategic goals product, marketing, pricing, financial, and operational strategies (Yukari, & Ian, 2011). Apple has kept its operating system proprietary and manufactures its own brand of computers; through its innovative initiatives the corporation has been able to manufacture new products and improve the existing products. Apple supports a community for the development of intermediary hardware and software products and digital content, thereby completing the offerings of the Company. Apple pricing strategies includes the development of marketing strategy, which enables the company to segment and target definite markets. Apple improves the quality of its products to enhance their performance and also, ensure stable demand even when there is an increase in prices. Apple designs and develops various products, services and technologies to suit different needs of consumers. The Company hires knowledgeable salespersons who convey the value of Apple products and services, thereby enhancing its ability to lure and retain customers. The Company forecast and access future economic risks, enabling them to confine their operations and financial undertaking in a way that will reduce the impact of these risks (www.apple.com). Role of Human Resource Management in Achievement of Company Goals. Human resource is the most significant resource of any organization; human capital provides unending source of ability, skill, knowledge, efficiency, and creativity for the execution of organizational goals and also plays a critical role in the process of management. Human resource management is a function in an organization that deals with employees’ issues such as recruitment, compensation, career development, communication, employee motivation, and training (David, 2009). Apple human capital department focus on hiring, retaining, utilizing, compensation, and labor welfare of employees. Human resource policies of the company aim to encourage employees to reflect the mission, culture, and values of the company; this positive image reinforces a competitive advantage. The stores of Apple employ knowledgeable and experienced personnel who provide service, advice, and training to customers thus improving the relationship of the corporation with its customers and boosting the growth in demand of company’s products. Human resource management plays a significant role in encouraging innovation within a company, and creation of an innovation culture. The company employees are the ones delegated to carry out research and development projects of a company. In 2011, David noted that human capital enables effective utilization of research findings and other resources of an organization with an aim of achieving both organization, individual, and social goals. Apple also provides training to its trading partners so as to enhance the performance of the corporation products in the market. Investing in Apple. Stocks are a component of almost any investment portfolio; however, there are various ways of investing in the stock market including through mutual funds. Mutual fund manager is a person who is responsible in overseeing the pool of funds invested in a particular mutual fund. While deciding which stocks of a company to buy, an investor carry out a research of those corporations that have been increasing dividends for the last ten years (Andreas, 2011). The earnings of Apple have been increasing each year despite the competition and harsh economic conditions. Basing my argument on the financial performance of Apple, yes I will be willing to invest in this company as a mutual fund manager. The Company also, continually invests in research and development; therefore, it will continue to manufacture new products thus providing more products in the market (Yukari, & Ian, 2011). Provision of a variety of products in the market will enable the company to counter stiff competition in the industry. As a mutual fund manager, one needs to understand the objectives of various investors and then decide the types of mutual funds that suit each investor. For investors interested in Apple ordinary shares the fund manager can readily avail the information of earning per share, for example, the basic earnings per common share for the last three years were, $ 9.22 (2009), $15.41 (2010), and $28.05 (2011). Conclusion. Investment in research and development and innovations enable companies to withstand the effects of varying economic conditions. The strategies of company enable it to design policies and programs to achieve it objectives. During unfavorable economic conditions, a company, which provides product mix in the market and employ demand oriented pricing strategies, are able to lure new customers and retain existing customers. Innovation enables a company to counter competition thus enlarging the market of its products. Human resource management plays a vital role in the achievement of company’s strategic goals. Human resource policies of an organization aim to recruit, retain, develop, and train employees with an aim of achieving the strategic goals of the company. While choosing to invest in mutual funds, an investor needs to research on the financial performance of the companies stocks. References Apple Inc. Information. Retrieved from: www.apple.com 2nd March 2012. Andreas, M. (2011). Financial Crisis – Impacts and Reactions. San Francisco: GRIN Verlag. Retrieved from: http://www.grin.com/en/e-book/164372/financial-crisis-impacts-and-reactions 2nd March 2012. David, B. (2009). Managing Human Resources in a Global Downturn. Retrieved from: http://www.grin.com/en/e-book/164372/financial-crisis-impacts-and-reactions 2nd March 2012. Yukari, I.K. & Ian, S. (2011). IPhones Power Apple’s Growth. New York: The Wall Street Journal. Retrieved from: http://online.wsj.com/article/SB10001424052748704570704576275350324616010.html 2nd March 2012. Read More