One of Apples biggest strengths is their brand loyalty as only 9% of Apple users said theywould consider moving to a different platform, as opposed to 25% of Android users. Another
strength is them being vertically integrated from owning chip manufacturers to retail stores, giving them the ability to streamline their processes. The weaknesses Apple faces are that although Steve Jobs passed away the stakeholders of the company still have very high expectations for new products and exclusive features. Another weakness is that there were many cross-platform alternatives to Apple’s features, which made it easy to use none Apple apps. The biggest opportunity for Apple is their IBM partnership, with IBM’s salesforce and network on their side Apple is now able to design a host of enterprise applications. Apples biggest threats are Amazon, Google and Microsoft. While they are chipping away at market share with their substitute products Apple is under more and more pressure to perform from shareholders. When analyzing Apple’s financial situation in 2013 from the top down, the figure of greatest concern is their weak sales growth. Sales grew $14,402 M to $170,910 M from $156,508 M, a growth of only about 9.2%. Although growth was at almost 10% when looking at Apple’s historic financials, we see that their average compound annual growth rate (CAGR) in the 3 years past (2012,2011,2010) has been about 54.2%. When historic average CAGR is compared to 2013's sales growth the number is proven to be extremely weak compared to expectations. Further cause for concern is gross margin percentage of 37.6% down from 43.9% in 2012. Declining margin indicates inefficient operating processes and cost controls. These metrics funnel down to a net income of $37,037 down from $41,733 last year a decrease of 11.25%. Overall Apple is a financially sound company but the slowdown in growth and profitability metrics are cause for concern. (Exhibit 1 & 9)Problems, Options and Pros & Cons:There is a clear stagnation of Apples revenue in the smartphone, computer, and digital content market. A clear problem for Apple is the flexibility of their competitors due to using an
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- Revenue, App Store, Compound annual growth rate