Apple’s Company Profile

Apple is a Californian based, American Multinational Corporation, providing personal computers, portable music players and communication devices. It also develops, manufactures and sells related peripherals, applications and related services. The company was founded by two young men Steve Jobs and Steven Wozniak in 1976 (Kahney, 2008, p. 5).

Their products can be grouped in 5 product lines: desktops, portables, IPod and other music related products and services, peripherals hardware, software service and other sales.

Apple sells its products worldwide through multi-channel-distribution in own retail stores, online stores, direct sales force and third-party wholesalers and resellers. Apple has 247 retail stores including 205 stores in the USA and 42 stores internationally. The corporation is operating on three continents, in America, Asia, and Europe employing 28.000 people (Datamonitor, 2009, [online]).

Apple is a well known brand, focused on high-end innovative products with high margins. Their products are famous for their reliability.

Apple has the reputation of being one of the most innovative companies in the world. The Fortune Magazine ranked Apple in 2008 as “The Most Admired Company” (Fortune, unknown, 2009 [online]).

The corporation has been growing dynamically and increased their profits despite the recession over the last couple of years. They increased their sales from 32 billion in 2008 to 36 billion in 2009. One of the major factors is the increasing brand loyalty of their customers.

Profit “Sales less purchases and expenses” (Jones, 2006, p. 597)

Profitability ratios

Profit margin

ROCE

Shareholder

Stakeholder

Stock turnover

Turnover

Working Capital

Content

Apple  ’s Company Profile  2

List  of Figures  6

1.  Legal Form  7

The  Role of Investors  7

1.1.  Forms of Business organization  8

1.1.1.  Company with Limited liability  8

1.2.  Company types  9

1.3.  Strengths and Weaknesses of a PLC compared to a Ltd  9

1.4.  Corporation  11

1.5.  Company Law with focus on PLC by executing Company Act 2006  12

1.6.  Corporate governance  13

1.7.  Board of Directors  13

1.8.  The responsibilities of Apples committee  15

2.  Benchmarking - Horizontal Analysis  16

3.  Recommended Strategy  20

3.1.  Strategy formulation  21

3.1.1.  BCG Matrix  21

3.1.2.  Ansoff’s Growth Strategies  24

3.2.  Strategy Implementation  26

3.2.1.  Balance Scorecard  26

3.2.2.  The Value Chain  28

Conclusion   30

Bibliography   31

Appendix   33

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List  of Figures  

Figure  1 Independency of shareholders and the organization  

Figure  2 Higlights of the company act  

Figure  3 Stakeholder  

Figure  4 Apple’s Board of Directors  

Figure  5 Apple’s Board of Directors  

Figure  6 Operating profit Comparison  

Figure  7 Apple’s Business Strategy  

Figure  8 Apple's Growth development  

Figure  9 Adopted BCG Matrix on the Example of Apple’s Operating Markets  

Figure  10 Apple’s Sales development per Operating Segment  

Figure  11 Apple’s Sales development per Operating Segment  

Figure  12 Implementing Apple in Ansoff Growth Strategy  

Figure  13 Apple’s two by two Grid  

Figure  14 Figure 14: Apple’s Balance Scorecard  

Figure  15 Figure 15: Apple’s Value Chain Highlights  

Figure  16 Apple's Turnover Forecast  

6

1. Legal Form

All forms of companies are subjected to general company laws that influence their way of acting. Additionally, for every company type, there are specific rules which the company form has to consider. General- and specific company laws unified, secure that every firm has standardized rights and obligations concerning to stakeholders, shareholders and the government. Furthermore, company law deals with treating creditors and debtors adjusted for every situation.

With regard to the shareholders, the company law regulates the interdependency among shareholders and the organization:

The Role of Investors

According to the principle of PLC and Corporation, shareholders have a special importance for the business. Not only the stakeholders depend on the organisation but also the organisation depends on them (Johnson et al., 2008, p.138). Especially the investors are of ultimate importance for PLC’s as they provide the fundamental capital of the company (Crane & Matten 2007, p.240).

three ge eneral types of business organization ns: Partnersh hip, sole trad ders and com mpanies wit h limited liability ( (public and private com pany) which h is the most t common fo orm and wil l be describe ed in the following g section (Lo owry & Digna am, 2006, p. 4). The desc cription of th he other two o forms is att tached in the Appe endix 9.

shareho lders debts i s limited by the shares.

“The most obviou lly, us advantage e is the acces ss to limited liability” (Bo ourne, 2008, p.1). Basica it me eans that the participants s do not have e to risk thei r own wealt h.

Accordin ng to Salomo on’s approac h, limited lia ability is regu ulated throug gh corporate e personality y which is also kno wn as Lifting g the Veil:

On the one hand, limited liability is a huge advantage because you cannot lose all your assets, but on the other hand, it districts the participant to have access to a loan from bank. The bank won’t assign a credit if there is not enough liability from their participators.

1.2. Company types

The company Act 1985 indicates a distinction between different types of companies. It is the private company where the business is normally funded by bank loans or personal savings. Regarding the public companies, the intention is to raise a large amount of money by offering shares to the public (Lowry & Digman, 2006, p.8).

The vast majority has chosen the form of a private limited company. In March 2002, there were 99.2% limited companies and 0.8% public companies (Hannigan, 2003, p18).

PLC’S gain more interest of the public because they offer their shares on the stock exchange. This fact provides the opportunity for every person to become an allottee by buying shares. “A private company cannot invite the public to buy shares, however they have no required minimum capital” (Lowry & Dignam, 2006, p. 8).

1.3. Strengths and Weaknesses of a PLC compared to a Ltd

As already mentioned, a PLC offers their shares to the public. It is at the same time the most obvious difference to a Ltd. that can only offer its shares to self chosen shareholders. Offering shares to the public is an enormous advantage in relation to raising investment capital. Furthermore, a public company offers the possibility of separating control. According to the fact, that participators and executives can modify the company, they have the privilege of perpetual succession. The company “never dies” (Bourne, 2008, p. 2).

The PLC r any operat can use the shareholder r’s capital fo tion concern pany, as lon g as they ing the com keep the e “sharehold ders happy”. his form of limited com t control wh ho buy its However, t pany cannot shares. I It is also pos ssible that co ompetitors b buy shares to o gain influe nce on the o organization’ ’s vote in order to reduce the competition .

In contr ast, the Ltd. to become . can elect t the investors s who want a member of the busin ness. The disadvan investment ntage of an L Ltd is that it is not able to o raise their capital in a c comparable scale like the PLC.

Moreove spend a lot er, a PLC is faced with the fact tha at it has to of money f for the high h level of formaliti ies which are e necessary to serve the e public with h reports of t the company y’s performa ance. The company y has to ma ke sure that t the reports s are accessi ible on the c company’s w website. Acco ording to this lega al act, it is evident that t competito ors will acce ss the repo rts to get b basic inform ation for analyzing g the busine ess strategy a and to compa are accounts s.

There is also the we eakness that t executives s can make d decisions wh hich are not t complying with the willingne ess of the co ompany. Wh en the comp pany loses t he trust of i ts sharehold ders, because e of nonefficient decisions, th hey might lo se shares, an nd conseque ently, capital to invest.

Howeve r, there is n no doubt th hat the PLC is the appr ropriate com mpany type for a Globa al Player. Neverth eless, a priva ate company y can also ris se to a publi ic limited co mpany whic ch is regulate ed by the Act of re e-register (se ee Appendix 5).

The Ame merges all advantag ges of an ltd and PLC in one compa ny type. The erefore, disa advantages o of limited liability a and separate e legal identi ty are simila ar to a PLC

These fa acts underlin e the possib bility of a cor rporation to act with few wer regulatio ons. For glob bal acting compani ies like Appl le, internatio onal account ting standar rds (IAS) hav ve been intro oduced. App ple states their ann nual report b by using the IAS standard d.