Apple Analysis

Industry Summary

Apple Computer's standard industrial classification (SIC) is 3571. SIC 3571 is used for companies that manufacture computer hardware. The top computer hardware manufacturers by sales are IBM, Hewlett-Packard, Compaq, Dell Computer, Cisco Systems, Sun Microsystems, Xerox, EMC, Seagate, and Gateway. Growth in the computer hardware industry in the United States is predicted to be slow because of the recession and market saturation. Consumers are holding on to their computers because they are adequate for now. According to International Data Corp, the industry was supposed to grow 16.6% in 2001. 16.6% growth is good for some industries, but not computer hardware manufacturers. The computer hardware industry will not see a lot of growth in the United States until the current recession ends

Hewlett-Packard and Compaq are attempting to merge to make the world's largest computer hardware manufacturer. Hewlett-Packard and Compaq together would have 87 billion dollars in earnings a year, operations in more than 160 countries, and over 145,000 employees. Although Hewlett Packard and Compaq claim the merger will benefit customers, some critics believe a monopoly will be created and consumers will pay higher prices.

Company Summary

Steve Jobs and Stephen Wozniak founded Apple Computer in 1976. Their first computer was called the Apple I. Apple was incorporated in 1977. After incorporating, Jobs and Wozniak introduced the Apple II computer.

Apple went public in 1980. Investors were eager to buy stock in a company on the cutting edge of technology. All of Apple's shares were sold in a few minutes.

In 1983 Apple introduced the Lisa computer, which was the underpinning for the Macintosh computer. The Lisa and the Macintosh had graphical user interfaces that were easy to use.

Jobs tried to take over Apple in 1985, but President and CEO, Sculley, stopped him with the support of the board. Jobs resigned and Wozniak left to start his own company soon after.

Apple faced some hard times over the years competing with Microsoft, IBM compatible computers, and PC clone manufacturers. Apple takes pride in being different, but its downfall seems to be that it is too different. Apple computers are not IBM compatible and over 90% of computers on the market are IBM compatible. Apple has manage to find a niche in the education and creative markets.

Specific Information

Ð'* A distinct competency of Apple is the ability to design innovative computers

Ð'* Apple found its niche in the education (27.7% desktop and 34.7% portable), technical, and business sectors

Ð'* Apple has an overall market share of 4.5%

Ð'* Apple's culture promotes creativity. Casual dress is allowed, workers are given considerable vacation time, and generous benefits

Ð'* Apple employs approximately 8,568 people in the United States

Ð'* Apple is headquartered in Cupertino, California.

Mission Statement Analysis and Revised Mission Statement

Apple's Mission Statement

Apple Computer is committed to protecting the environment, health, and safety of our employees, customers and the global communities where we work and live. We recognize that by integrating sound environmental, health, and safety management practices into all aspects of our business, we can offer technologically innovative products and services while conserving and enhancing resources for future generations. Apple strives for continual improvement in our environmental, health and safety management systems and in the environmental quality of our products, processes and services.

Mission Statement Analysis

Apple's mission statement is pretty good. It expresses concern for the environment, employees, safety, and customers. It tells us that Apple's customers are worldwide but it does not tell us exactly who they are. Apple's mission statement expresses concern for being technologically current. It does not say precisely what its products and services consist of. It does not address concern for survival, profits, and growth. It does address philosophy, concern for public image, and self-concept be expressing a sincere concern for preserving the environment. Apple's mission statement expresses its concern for employees by stating a concern for safety.

Mission Rewrite-

Apple Computer's mission is to make the most technologically current personal computer and related products on the market for customers worldwide. Apple strives to give shareholders the best return on their investment in the industry while maintaining respect for communities, employees, and the environment.

External Analysis Summary

Apple is below average in taking advantage of opportunities. 40-50% of homes in the United States do not have PCs. These consumers need to be targeted and convinced that they cannot live without a computer. Internet use has grown worldwide. If Apple can get consumers to use an Internet service it is affiliated with, it may be able to persuade consumers to buy its computers. 40% of worldwide spending on IT is on computer hardware. Apple computers are not attractive to a lot of consumers because it is not IBM compatible like the majority of PC users. There is an increasing demand for faster/advanced technology. Although Apple is very good at creating faster/advanced technology, IBM compatibility is a bigger issue with customers than advanced technology. Apple has done a superb job capturing the education market (See EFE matrix).

Apple's is below average in avoiding threats (See EFE matrix). HP and Compaq are talking of merging and Apple stands alone. The economic downturn has hurt all companies in the computer hardware industry. Apple is being hurt by the recession like other computer hardware companies.

Apple's EFE score was 1.48 (See EFE matrix). 2.5 is an average score. Apple's 1.48 score is well below average and tells us that Apple is below average in capitalizing on opportunities and avoiding threats. The EFE matrix was constructed by listing opportunities and threats, assigning a weight to each opportunity and threat, assigning a rating to each opportunity and