Apple Inc. Management Case Study

Team MembersAllison Fukano | Jason Khoo | Megan Darger | Yuri Flores | Hannah Tran

Brief Historical Review

• Timeline

• Starts in 1976• 70’s, 80’s, 90’s, 2000-2005, 2006 – Present

2

Apple Computer Inc founded: 1st product was Apple I computer

Apple II is released

Apple introduced the Apple II+

1976 1979

1977

Apple: 1970’s

Apple goes public and files for IPO

Apple III is released

Steve Jobs is fired and leadership now under John Scully

Apple discontinues Apple III; 1984

Macintosh commercial

Apple reaches $1 Billion in sales and is first personal computing company

Apple registered Apple.com as a

domain name

1980

1981

1982

1984

1985

1987

Apple: 1980’s

Apple teams up with Motorola to create PReP; Power book line of computers is released

Apple releases the

Newton

All in one iMac is released

Apple introduces the online Apple store; Steve Jobs

named interim CEO

Purchase NeXT and Steve Jobs enters the company again

1991

1993

1996

1997

1998

Apple: 1990’s

Steve Jobs officially named CEO

Opened Apple retail stores in major retail markets; first iPod is released; Mac Odx is released

Steve Jobs is diagnosed with cancer

Name changed to Apple Inc.;Release of the first version of the iPhone; Apple TV released

Apple introducesthe first iPad

Apple: 2000’s 2000 2003 2010

2001 2007

Steve Jobs takes a leaveof absence & Tim Cook isNamed interm. Later that yearJobs resigns; Jobs passes away

Apple watch is announced

Apple: 2011 - Present

2011

2014

First iPhone is released

iPhone 3G is released

iPhone 3GS isreleased

iPhone 4 is released

2007 2009

2008 2010

iPhone 4S is released

iPhone 5 is released

iPhone 5S & 5C are released

iPhone 6 & 6 Plusare released

2011 2013

2012 2014

1976 – 1996To be the leadingprovider of personalcomputers to those of theupper middle and elite class

1996 – 2007Stand as an innovative leader indigital equipment provider

2008 – PresentTo be the premierprovider of highquality & user friendly iPhonesfor consumer entertainment& business purposes

Apple’s Performance Objectives Release the iPhone 7 by September 2016 with thesize reduced by 10% & a 10%increase in memory capacity

By 2018 increase net profitmargin to 35%

By 2020 obtain a35% market shareIn China

Apple I and II released

Macintosh personal computerlaunched

Apple Online Store Opened

iPod and iTunes launched

1976-77 1997

1984 2001

Growth|Concentration|Horizontal integration

iPhone released

Macbook Air and App Storelaunched

Apple release the iPad

iCloud launched

2007 2010

2008 2011

Growth|Concentration|Horizontal integration

Acquired StylewareAnd Nashoba Systems

Acquired NeXT and Steve Jobs

Acquired Astarte – DVD Authoring Software and SoundJam MP

iCloud launched

1988 2000

1997 2011

Growth|Diversification|Concentric

Acquired Zayante

Acquired FingerWorks

Acquired Placebase and Lala.com

C3 Technologies

2002 2009

2005 2011


Acquired Chomp

SnappyLabs and Beats Electronics

2012

2014


Apple went public at $22 per share. Made more millionaires than any company in history

Power struggle between Jobs and Scully. Jobs removed from management duties and resigned

Named “first golden age” of Macintosh

John Sculley leaves after multiple failed product launches

1980 1989 - 91

1985 1993

Stability

Gil Amelio replaced Michael Spindler as CEO

After three years of record low stock prices, Amelio ousted and Jobs named interim

Stock prices jumped from $6 to $80. Market cap surpassed Dell

Jobs announces Apple Inc and shared hit all time high at $97.80

1996 2003 - 06

1997 2007

Stability

Apple named most valuable consumer-facing brand in the world

Stock rose the company’s value to world record $624 billion

Apple planned to launch in Japan and India

2011 2014

2012

Stability

Historical Functional Strategies

Nature of Market

• Always - B2C

National •

•

•

•

Breadth of Product Line Partial

• 2007 iPhone 2G – 4, 8, 16 GB

• 2008 iPhone 3G – 8, 16 GB

• 2009 iPhone 3GS – 8, 16, 32 GB

• 2010 iPhone 4 – 16, 32 GB

• 2011 iPhone 4S – 16, 32, 64 GB

• 2012 iPhone 5 – 16,32, 64 GB

• 2013 iPhone 5C – 8, 16, 32 GB

• 2013 iPhone 5S – 16, 32, 64 GB

• 2014 iPhone 6 – 16, 64, 128 GB

• 2014 iPhone 6 Plus – 16, 64, 128 GB

Breadth of Product Line Partial

• 2007 iPhone 2G – 4, 8, 16 GB

• 2008 iPhone 3G – 8, 16 GB

• 2009 iPhone 3GS – 8, 16, 32 GB

• 2010 iPhone 4 – 16, 32 GB

• 2011 iPhone 4S – 16, 32, 64 GB

• 2012 iPhone 5 – 16,32, 64 GB

• 2013 iPhone 5C – 8, 16, 32 GB

• 2013 iPhone 5S – 16, 32, 64 GB

• 2014 iPhone 6 – 16, 64, 128 GB

• 2014 iPhone 6 Plus – 16, 64, 128 GB

Insert iphones here

Degree of Customization

Standard

Color

• 2007-2009 – black or silver

• 2010-2013 – black, silver, or white

• 2013-now – pink, green, yellow, blue, white, black, silver, gold, or space gray

Degree of Customization

Siri

• 2011 – now

IOS software

• 2007 – IOS 1.0

• January 2015 - IOS 8.1.3

Size

• 2007 – 2012 – 3.5”

• 2013 – 4” display

• 2014 – 4.7” or 5.5” display

•••

•

•

•

•

Degree of Selectivity of Channels

• Medium (Big name retailers and chains, colleges, online retail)

• In the past, Low because wanted to sell as many as possible

Advertising Media

• Print (I.e be different)

• Radio/TV (Product Placement)

• Movies (Product Placement)

• Billboards (all over big cities)

• Throughout Apple’s history they have been seen as a leader in advertising. With the infamous 1984 commercial they have utilized a heavy emphasis on advertising.

• Link to history of Apple Ads (includes print and commercials)

http://www.huffingtonpost.com/2011/10/06/steve-jobs-apples-best-ad-campaigns_n_998129.html

Use blogs and their fanatical group of super fans. Always have a line out the door with every launch of a new phone or tablet.

Short Term Liabilities= Short Term Liabilities/Total Assets

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2010 2011 2012 2013 2014

Apple Samsung Nokia Motorola

2010 2011 2012 2013 2014

Apple 28% 24% 22% 21% 27%

Samsung 30% 28% 26% 22% 23%

Nokia 45% 48% 46% 38% 35%

Motorola 34% 27% 26% 27% 22%

Long Term Liabilities= Long Term Liabilities/Total Assets

0%

10%

20%

30%

40%

50%

60%

2010 2011 2012 2013 2014

Apple Samung Nokia Motorola

2010 2011 2012 2013 2014

Apple 9% 10% 11% 19% 25%

Samsung 4% 6% 7% 6% 7%

Nokia 14% 13% 24% 17% 24%

Motorola 23% 35% 48% 42% 52%

Retained Earnings= Retained Earnings/Total Assets

0%

10%

20%

30%

40%

50%

60%

70%

80%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 49% 54% 58% 50% 38%

Samsung 63% 63% 66% 69% 71%

Nokia 27% 22% 13% 10% 22%

Motorola 17% 7% 13% 20% 33%

Dividend Payment=Dividends/Net Income

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 0% 0% 6% 29% 28%

Samsung 5% 6% 5% 0% 13%

Nokia 80% 0% 0% 0% 0%

Motorola 0% 13% 32% 28% 25%

Credit- Rent

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 0.36% 0.29% 0.28% 0.31% 0.31%

Samsung 0.01% 0.01% 0.01% 0.00% 0.00%

Nokia 0.01% 0.01% 0.01% 0.01% 0.01%

Motorola 0.48% 0.66% 0.35% 0.43% 0.59%

Credit- Lease

0%

1%

1%

2%

2%

3%

3%

4%

4%

5%

5%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 2.78% 2.61% 2.51% 0.29% 0.29%

Samsung 0.08% 0.09% 0.06% 0.05% 0.04%

Nokia 2.73% 2.84% 3.36% 2.18% 0.00%

Motorola 2.29% 2.18% 2.81% 4.14% 4.36%

Credit- Purchase

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 2.67% 3.66% 4.71% 3.94% 4.13%

Samsung 16.10% 14.11% 12.68% 10.82% 9.49%

Nokia 1.74% 1.65% 1.54% 1.62% 1.48%

Motorola 0.09% 0.23% 0.65% 0.48% 0.45%

Network Innovations (Software), Orion Network Systems, Styleware, NashobaSystems

1988 1989 1997 1999

Coral SoftwareXemplar Education and Raycer Graphics

NeXT and Power Computing Corporation

NetSelector, Astarte-DVD Authoring Software, and SoundJam MP

2000 2001 2002 2005

Bluefish Labs, bluebuzz, Spruce Technologies, and PowerSchool

Schemasoft and FingerWorks

Nothing Real, Zayante, Silicon Grail Corp-Chalice, Propel Software, PrismoGraphics, and Emagic

Silicon Color and Proximity

2006 2008 2009 2010

P.A. SemiiQuattro Wireless, Intrinsity, Siri, Poly9, Polar Rose, and IMSense

Placebase, Lala.com

Chomp, Redmatica, AuthenTec, and Particle

SnappyLabs, Busrtly, Luxvue Technology, Spotsetter, Swell, BookLamp, Beats Electronics, and Press

C3 Techonoligies and Anobit

Novauris Technologies, WiFiSlam, Locationary, HopStop.com, PassifSemiconductor, Matcha, Embark, Algo, Cue, PrimeSense, Topsy, BroadMap, and Catch.com

Semetric and FoundationDB

2011 2012 2013 20152014

Operations Systems- Degree of Integration

•

•

•

•

•

Two large plants (Texas and Ireland)

1980 1990 1996 2004

Medium size plants in US

Many Foxconnfactories in China

Shift manufacturing overseas and reduced US plants

Carrollton, Texas and Cork, Ireland

1980 1981 1983 1985

Singapore Plant

Closed Carrollton, Garden Grove and parts of the plant in Cork, Ireland

Fremont, CA

Fountain, Colorado

1991 1992 2004

Elk Grove

Shut down last of US manufacturing line in Elk Grove. Most plants located in China

Type of Equipment

General Purpose•

•

•

Production Scheduling

•

•

Inventory Turnover Ratio= COGS/Average Inventory

0.00

20.00

40.00

60.00

80.00

100.00

120.00

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 37.62 83.03 111.06 60.43 53.18

Samsung 7.00 7.47 7.57 7.71 8.85

Nokia 13.50 11.27 11.26 6.29 4.90

Motorola 9.27 4.33 8.49 8.61 7.04

R&D Expenditure

0%

5%

10%

15%

20%

25%

30%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 2.73% 2.24% 2.16% 2.62% 3.30%

Samsung 5.88% 6.05% 22.53% 23.70% 25.67%

Nokia 13.81% 14.52% 20.00% 20.61% 19.55%

Motorola 15.61% 12.62% 13.36% 12.22% 11.58%

Applied and basic research

1995

1997-2000Apple used only

applied research and focused on

their current products

2001-PresentApple uses both applied and

basic research

Engineering Emphasis•

Nature of Product Design•

•

•

2007 iPhone 4.5 in. H, 2.4 in. W, .46 in. D, 3.5 in. screen

2009 iPhone 3GS Smear free screen,.1 oz. heavier

2008

iPhone 3GS Plastic polycarbonte housing,.02

in. higher, black and white case, glass frame

2010iPhone 4 Stainless steel body, metal band with

multiple mobile and data antennas flat back .11 in. thinner, 2 grams heavier

2012iPhone 5 Anodized

aluminum body, .32 in. longer, m07 in. thinner, an

oz. ligher, larger screen

2011 iPhone 4S Access panel for SIM card

2013iPhone 5S available in silver, gold,

space gray, shorter by .03 in., more narrow by .02 in., .05 in. less thinner, .70 oz. lighter & 5C available in blue, yellow, pink, white both with 4 in. screens

2014iPhone 6 .54 in. longer, .33 in. wider, .03 in. more shallow, .60 oz. heavier & 6

Plus 1.32 in. longer, .73 in. more narrow, .01 in thicker 1.42 oz. heavier

Brief Historical Review

• Timeline

• Starts in 1976• 70’s, 80’s, 90’s, 2000-2005, 2006 – Present

58

Stock Performance

315.27382.54

593.65 558

118.81

831.41

1226.661290.27

1362.96

1175.78

9.74 5.8 3.29 8 8.068.33 46.49 54.63 65.75 65.59

1,186.601,246.91

1,416.34

1,806.55

2,065.78

2010 2011 2012 2013 2014

Pri

ce in

US

do

llars

Apple Samsung Nokia Motorola S&P

Market Share

Apple3%

Samsung18%

Nokia29%

Motorola2%

Other Competitors48%

2010

Apple5%

Samsung18%

Nokia24%

Motorola2%


2011

Apple7%

Samsung22%

Nokia19%

Motorola2%


2012

Apple8%

Samsung25%

Nokia14%

Motorola3%


2013

Apple9%

Samsung17%

Nokia7%

Motorola5%


2014

Market Share

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2010 2011 2012 2013 2014

Sale

s in

mill

ion

s o

f U

S d

olla

rs

Apple Samsung Nokia Motorola Other Competitors

Market Share

Net Sales

$0

$50,000

$100,000

$150,000

$200,000

$250,000

2010 2011 2012 2013 2014

Ne

t sa

les

in m

illio

ns

($)


Net Income

-$10,000

$0

$10,000

$20,000

$30,000

$40,000

$50,000

2010 2011 2012 2013 2014

Ne

t In

com

e in

mill

ion

s ($

)


Number of Units Produced

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 46,600 89,260 130,130 150,790 169,220

Samsung 281,070 313,900 384,630 444,440 317,200

Nokia 461,320 422,480 333,940 250,790 138,100

Motorola 38,550 40,270 33,920 62,100 92,700

Dollar-profit-per-unit of units produced

$(0.05)

$-

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

2010 2011 2012 2013 2014


Number of Employees

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2010 2011 2012 2013 2014


Dollar-profit-per-employee

-$0.10

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

2010 2011 2012 2013 2014


ROE=Net profit after taxes/Shareholder’s Equity

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 29.32% 33.83% 35.30% 29.98% 35.42%

Samsung 19.90% 14.40% 21.40% 22.40% 10.80%

Nokia 9.34% -10.69% -40.11% -11.10% 7.73%

Motorola 6.13% 14.39% 20.78% 31.74% 40.63%

ROA=Net profit after taxes/Total Assets

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 18.64% 22.28% 23.70% 17.89% 17.04%

Samsung 13.10% 9.50% 14.20% 15.40% 7.60%

Nokia 3.43% -4.11% -12.65% -2.93% 3.18%

Motorola 2.47% 5.86% 6.62% 8.96% 11.66%

Gross Profit Margin=(Sales-Cost of Goods Sold)/Net Sales

0%

10%

20%

30%

40%

50%

60%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 39.38% 40.48% 43.87% 37.62% 38.59%

Samsung 33.64% 32.03% 37.02% 39.79% 37.79%

Nokia 30.20% 29.30% 36.10% 42.10% 43.73%

Motorola 35.77% 50.51% 49.99% 48.77% 48.29%

Net Profit Margin=Net profit after taxes/Net Sales

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 28.19% 31.22% 35.30% 28.67% 28.72%

Samsung 11.20% 9.48% 14.44% 16.08% 12.14%

Nokia 4.90% -2.80% -5.30% 4.10% 10.67%

Motorola 4.09% 10.46% 14.44% 13.97% 22.01%

Earnings Per Share=Net Profit after taxes-preferred stock dividends/Average number of common shares

-$1.00

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 2.16 3.95 6.31 5.68 6.45

Samsung 0.09 0.08 0.14 0.19 0.15

Nokia 0.27 -0.39 0.06 -0.009 0.14

Motorola 0.86 0.57 1.15 1.29 0.97

Common Sized Income Statement - 2010




Net Sales 100% 100% 100% 100%

Cost of Sales (56.13%) (62.98%) (63.90%) (50.01%)

Gross Profit 43.87% 37.02% 36.10% 49.99%

S&A Expenses (6.42%) (22.58%) (8.90%) (22.57%)

R&D (2.16%) (22.53%) (20.00%) (13.36%)

Operating Profit 35.30% 14.44% (5.27%) 10.58%

Other income/expense, net 0.33% (0.01%) (8.03%) 14.12%

Income before taxes 35.63% 14.88% (7.66%) 13.97%

Provision for income taxes (8.96%) (3.02%) (1.97%) (3.87%)

Net income 26.67% 11.86% (9.62%) 10.13%



Is the company’s current performance satisfactory? Is the company achieving its performance objectives?

III. Examination of the Corporate Top Decision Makers

Ratio of the Internal vs. External Directors

Internal : External

Board Committee & Membership

Audit Compensation

Audit & Com

pensation

NominatingName Title

Andrea Jung Director, Chairman of Compensation Committee and Member of Nominating & Corporate Governance Committee

Robert Iger Independent Director, Chairman of Nominating & Corporate Governance Committee and Member of Audit & Finance Committee

Millard Drexier Director, Member of Nominating & Corporate Governance Committee andMember of Compensation Committee

FinanceName (Connections) Title


Arthur Levinson Ph.D. Chairman, Member of Audit & Finance Committee and Member of Compensation Committee

Ronald Sugar Independent Director and Chairman of Audit & Finance Committee

Susan Wagner Director and Member of Audit & Finance Committee

Nominating &

Finance

Corporate Governance

Name Title

Millard Drexier Director, Member of Nominating & Corporate Governance Committee and Member of Compensation Committee


Andrea Jung Director, Chairman of Compensation Committee and Member of Nominating & Corporate Governance Committee

Corporate Governance

Art Levinson

Ronald Sugar

Sue Wagner

External Directors – 2014 Compensation

External Directors – Relevant Education

External Directors – Average Stock Ownership

External Directors – Personal Profile

Historical Review of Management Style

• Steve Jobs • Tim Cook•

•

•

•

•

•

•

•

•

•

•

•

•

•

Top Management Team’s Compensation

Compensation Compared with Competitors

Apple Total Nokia Total Samsung Total

Timothy D. Cook | Chief Executive Officer

$9,222,638Stephen Elo, EVP Devices & Services, former President

and CEO$10,427,463 Oh-Hyun Kwoon, CEO $6,095,700

Luca Maestri | Senior Vice President and CFO

$14,002,801Risto Siilasmaa, Chairmen of

the Board of Directors, Interim CEO

$540,000 Boo-Keun Yoon, CEO $4,580,100

Peter Oppenheimer | Former SVP and CFO

$4,517,720Timo Ilhamuotila, EVP Chief

Financial Officer$3,636,124 Jong-Kyun Shin, CEO $5,591,700

Angela Ahrendts | SVP, Retail and Online Stores

$73,351,124Louise Pentland, EVP Chief

Legal Officer$2,440,042 Sang-Hoon Lee, Director $3,360,600

Eduardo H. Cue | SVP, Internet Software and Services

$24,445,739 Michael Halherr $2,352,97 Gee-Sung Choi, former CEO $3,573,000

Jeffery Williams | SVP, Operations $24,403,235 Jo Harlow, EVP Smart Devices $2,200,909Ju-Hwa Yoon, Former

Director$519,300

Eddy Cue is Apple's senior vice president of Internet Software and Services, reporting to CEO Tim Cook. Eddy oversees Apple's industry-leading content stores including the iTunes Store, the revolutionary App Store and the iBooksStore, as well as Apple Pay, Siri, Maps, iAd, Apple's innovative iCloud services, and Apple’s productivity and creativity apps. Eddy's team has an excellent track record of building and strengthening online services to meet and exceed the high expectations of Apple's customers.

Luca Maestri

Luca Maestri is Apple’s senior vice president and Chief Financial Officer reporting to CEO Tim Cook. As CFO, Luca oversees the accounting, business support, financial planning and analysis, treasury, M&A, investor relations, internal audit and tax functions at Apple. Luca joined Apple in 2013 as vice president of Finance and corporate controller, and has worked closely with Apple's senior leadership since his arrival.

Production-per-employee= Units Produced/Total Employees

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 1.00 1.48 1.79 1.88 1.83

Samsung 0.82 0.85 0.91 1.11 0.97

Nokia 3.57 5.23 4.65 4.23 2.53

Motorola 0.76 1.75 1.54 2.96 6.18

Receivables Turnover Ratio= Sales/Average Gross Receivables

0.00

5.00

10.00

15.00

20.00

25.00

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 14.71 19.90 19.20 14.22 11.96

Samsung 8.30 8.38 7.91 7.26 7.52

Nokia 5.46 5.24 4.74 3.01 3.55

Motorola 5.70 3.20 4.64 4.58 3.53

Average Collection Period= 365/Receivables Turnover

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

2010 2011 2012 2013 2014

Day

s


2010 2011 2012 2013 2014

Apple 24.82 18.34 19.01 25.66 30.51

Samsung 50.00 43.53 46.13 50.28 48.51

Nokia 66.86 69.64 77.00 121.37 102.72

Motorola 64.01 114.22 78.62 79.77 103.31

Inventory Turnover Ratio= COGS/Average Inventory

0.00

20.00

40.00

60.00

80.00

100.00

120.00

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 37.62 83.03 111.06 60.43 53.18

Samsung 7.00 7.47 7.57 7.71 8.85

Nokia 13.50 11.27 11.26 6.29 4.90

Motorola 9.27 4.33 8.49 8.61 7.04

Days of Inventory= 365/Inventory Turnover

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

2010 2011 2012 2013 2014

Day

s


2010 2011 2012 2013 2014

Apple 6.95 5.18 3.26 4.37 6.30

Samsung 50.10 48.88 48.22 47.33 41.25

Nokia 27.03 32.39 32.40 58.04 74.42

Motorola 39.38 84.39 43.00 42.40 51.88

Fixed Asset Turnover= Sales/Fixed Assets

0.00

5.00

10.00

15.00

20.00

25.00

2010 2011 2012.00 2013 2014


2010 2011 2012 2013 2014

Apple 16.89 17.26 13.48 10.67 9.82

Samsung 2.60 3.18 3.08 2.87 3.17

Nokia 22.55 20.80 18.57 12.73 13.54

Motorola 9.93 6.25 10.03 10.55 8.65

Total Asset Turnover= Sales/Total Assets

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 1.06 1.13 1.07 0.89 0.83

Samsung 0.9 1.16 1.19 1.14 1.25

Nokia 1.13 1.03 0.91 0.46 0.53

Motorola 0.75 0.42 0.65 0.71 0.53

Is the management effective?

IV Examination of Internal Environment of the company

•

•

•

•

Corporate Culture

Corporate Structure

Matrix

Steve Jobs

Corporate Structure

Matrix

Tim Cook

Corporate Structure

•

•

•

•

•

Core Competencies•

•

•

•

Common Sized Balance Sheet 2010




Common Sized Balance Sheet 2014Apple Samsung Nokia Motorola

Cash and cash equivalents 5.97% 7.31% 12.00% 37.94%

Accounts Receivable, net 7.53% 10.72% 16.28% 13.52%

Inventories 0.91% 7.52% 6.05% 3.31%

Other Current Assets 4.23% 0.78% 4.33% 7.10%

Total Current Assets 29.56% 49.97% 65.16% 66.00%

Property, Plant, and Equipment 8.90% 35.10% 3.40% 5.27%

Goodwill 1.99% 0.00% 12.17% 3.67%

Intangible Assets 1.79% 2.08% 1.66% 0.00%

Other non-current Assets 1.62% 1.01% 0.37% 1.39%

Total Assets 100.00% 100.00% 100.00% 100.00%

Accounts payable 13.02% 3.43% 10.98% 5.18%

Accrued liabilities 7.96% 5.59% 17.24% 16.37%

Current portion of long-term debt 0.00% 0.77% 0.00% 0.04%

Other current liabilities 6.38% 0.14% 0.00% 0.00%

Total current liabilities 27.37% 22.57% 34.60% 21.59%

Long-term debt 12.50% 1.15% 12.23% 32.58%

Other non-current liabilities 10.71% 0.65% 10.43% 19.29%

Total liabilities 51.89% 27.05% 58.84% 73.46%

Preferred Stock 0.00% 0.05% 0.00% 0.00%

Common Stock 10.06% 0.34% 1.17% 0.02%

Retained Earnings 37.59% 73.57% 22.36% 32.72%

AOCI 0.47% 0.03% 0.00% (17.80%)

Total Equity 48.11% 72.95% 41.16% 26.54%

Total liabilities & Equity 100.00% 100.00% 100.00% 100.00%

Debt to Equity Ratio= Total Debt/Total Equity

0%

20%

40%

60%

80%

100%

120%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 0.00% 0.00% 0.00% 13.73% 31.64%

Samsung 11.40% 13.19% 10.76% 96.57% 59.00%

Nokia 32.52% 38.24% 60.06% 99.00% 31.05%

Motorola 24.60% 29.11% 56.63% 66.71% 100.00%

Times Interest Earned= Profit before taxes+Interest charges/Interest charges

-30

20

70

120

170

220

270

320

370

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 0.00 0.00 0.00 369.79 140.28

Samsung 34.26 27.64 108.80 121.14 192.39

Nokia 8.03 -5.05 -3.47 1.76 2.03

Motorola 4.06 6.59 6.76 5.81 -6.90

Current Liabilities to Equity= Current Liabilities/Shareholder’s Equity

0%

20%

40%

60%

80%

100%

120%

140%

160%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 43.36% 36.51% 32.60% 35.34% 56.88%

Samsung 44.71% 39.43% 38.63% 34.21% 30.94%

Nokia 108.00% 125.00% 148.00% 142.00% 84.00%

Motorola 79.28% 72.34% 101.00% 87.29% 81.34%

Debt-to-Asset Ratio=Total Debt/Total Assets

0%

5%

10%

15%

20%

25%

30%

35%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 0.00% 0.00% 0.00% 8.19% 15.22%

Samsung 8.92% 8.58% 7.22% 4.60% 4.30%

Nokia 13.49% 14.70% 18.51% 26.45% 12.78%

Motorola 10.57% 11.02% 14.69% 20.77% 32.62%

Current Ratio= Current Assets/Current Liabilities

0.00

1.00

2.00

3.00

4.00

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 2.01 1.61 1.5 1.68 1.08

Samsung 1.54 1.61 1.86 2.16 2.21

Nokia 1.55 1.46 1.43 1.46 1.86

Motorola 1.97 2.30 2.22 2.18 3.06

Quick Ratio= Current Assets-Inventory/Current Liabilities

0.00

0.50

1.00

1.50

2.00

2.50

3.00

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 1.72 1.35 1.24 1.40 0.82

Samsung 1.11 1.17 1.34 1.61 1.67

Nokia 1.13 1.04 1.06 1.34 1.53

Motorola 1.39 1.82 1.64 1.60 2.45

Cash Ratio= Cash/Current Liabilities

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 1.24 0.93 0.76 0.93 0.4

Samsung 0.25 0.25 0.4 0.32 0.32

Nokia 0.11 0.11 0.26 0.39 0.35

Motorola 0.48 0.21 0.44 1.00 1.76

Manufacturing/Operations Resources

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Manufacturing/Operations Resources

R&D Resources

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R&D Intensity=R&D/Sales

0%

2%

4%

6%

8%

10%

12%

14%

16%

2010 2011 2012 2013 2014


2010 2011 2012 2013 2014

Apple 2.73% 2.24% 2.16% 2.86% 3.30%

Samsung 5.81% 6.05% 6.14% 6.82% 7.87%

Nokia 3.63% 3.62% 3.72% 8.89% 2.78%

Motorola 13.61% 12.62% 12.60% 12.22% 11.58%

Degree of Technological Competence•

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Degree of Proficiency in Technology Transfer•

Marketing Resources

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Marketing Resources

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Price •

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Marketing Resources

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Marketing Resources

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Human Resources

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Work Environment:

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Quality of Work Life

Utilization of Autonomous Work Teams

Information Technology Resources•

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What are the major Strength & Weakness of the Company?

Section V.

Task Environment/Industry Analysis

Competitors

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Potential Entrants

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Substitutes

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Customers

Suppliers

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Other Interest Groups

Societal Environment Analysis

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Socio-Cultural Forces

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Political/Legal Forces

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Technological Forces

Economic Forces•

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Economic Forces- Disposable Personal Income

SWOT ANALYSIS

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SWOT ANALYSIS

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Short Term & Long Term Performance

Short Term

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Long Term

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VI. New Plan

Plan 1: Increase global market share in China


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Thank you

Leadership & Management

Apple Inc. Management Case Study