Question

Your grandparents have been left a substantial amount of money and want to invest in a company. Your grandfather trusts you to make a recommendation, but he also wants to see the reasoning behind your choice.
You have an idea of which company to choose and you decide to prepare 3 sets of documents for your grandparents to consider: business analysis, combined income and cash flow statement, and trend analysis.

Business Analysis
Select a public company that trades on either the NYSE or the NASDAQ. Perform a business analysis (both external and internal) for your company using the most recent information from various sources. Possible sources include the following:
Annual report or form 10-K
Magazine or newspaper articles
Company Web sites
Government information
Industry information
Rating agencies
Analyst reports
Internet articles
Your analysis should be approximately 5 pages long.

Answer 1

Business Analysis of Apple Inc.

Time Frame:

Apple was founded on April 1, 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. January 3, 1977 Apple was incorporated to Apple Computers Inc. January 9, 2007 Apple Computers Inc. was renamed to Apple Inc. Apple Inc. is based in Cupertino, California under Tim Cook as CEO.

They helped contribute a significant amount to the information age. They focused on a couple of their main products, these were the:

(a) Apple I (b) Apple II (c) Lisa (d) MacIntosh

At the very beginning when they dropped out of college they were destined for success and challenged companies such as IBM and Microsoft in an attempt to gain the edge on the development of the very first PC’s.

Industry:

The consumer electronics industry is considered to be one that is revolutionary and full of new innovations. Different technological advances and products have changed how we live and perceive the world. Apple Inc. has been a leading contributor to this new age of tech. Let’s take a look at the history of this industry.

Consumer electronics industry:

This industry’s purpose is to create electronic products for consumers to use on a daily basis. Some of these products include the radio, television, CDs,

and video games. These electronic devices made consumers want to adopt new technology quicker because...

1. “Technology’s compatibility to the lifestyles of the consumers”

2. “The technology’s interoperability with existing equipment”

With consumers adapting faster to new consumer technologies new firms started to pop up to capitalize on the industry’s success. Apple, Microsoft, Google, Riot Games, Paramount, NBC, ABC, Pixar etc. Each company offered their own differentiated products to capture a share of the market by appealing to the masses or focusing on niche segments.

As a whole the consumer electronics industry has followed 3 distinct trends:

1. Miniaturization

2. Digitalization

3. Convergence

Each one of these trends focuses on making electronics more appealing to consumers. Smaller devices for portability, ease of transmitting data, and combining features into one device.

As a result, of the constant innovations and internet access the consumer electronic industry made about $209 billion dollars of revenue in 2013. In addition, the average household has 5 devices connected to the internet. This shows the industry is still growing with hungry consumers waiting for new technological advances to change their lives.

NAICS and SIC Codes:

1. SIC # 3571-Electronic Computers
2. SIC # 5734-Computer and Computer Software Stores
3. SIC # 7378-Computer Maintenance and Repair
4. NAICS # 33411-Personal computers manufacturing
5. NAICS # 423430-Printers, computer, merchant wholesalers
6. NAICS # 423430-Software, computer, packaged, merchant wholesalers

Major Competitors:

Some of the top competitors in the technology industry Apple competes with include:

1. Google Inc.
2. Microsoft Inc.
3. Hewlett-Packard Company
4. Blackberry Limited

Company:

Apple Inc. is part of the consumer electronic industry. They are based in California with recent expansion into global markets. There biggest product line has been the iPhone. They are currently in the process of building their own “campus” as a corporate center.

        

Apple is a multinational corporation that has stores in 43 different countries and provinces according to their website. In addition, Apple has their own individual website to maximize sales growth. As of September 2011, Apple has at least 60,400 full-time employees and an additional 2,900 temporary employees. 52wk Range: $385.10 - $575.14

Apple is known for having a variety of business lines in its consumer electronics industry:

1) iPhone

2) iPad

3) Mac

4) iPod

5) Software

6) Accessories

In 2013, Apple’s revenue was $170.910 billion

1. iPhone = $94,000,500,000

2. iPad = $30,763,800,000

3. Mac = $22,218,300,000

4. Software = $15,381,900,000

5. Accessories = $5,127,300,000

6. iPod = $3,418,200,000

Issues:

1. Product differentiation:

In today’s age there is a thirst for hot new products, and keeping a high end product on the shelves can be a challenge.

2. Following the Age of Steve Jobs:

People today question Apple and if they still have what it takes to continue to compete against their competitors.

3. Product Diversification:

Apple has continuously expanded its product depth to extract all of its value. The question is how long can they keep doing this until consumers lose interest?

4. Maintaining Customer Loyalty:

Apple needs to maintain their high level of customer service to maintain their customer loyalty. This a big differentiating factor for their business.

5. Market Saturation:

A saturated market leads to less profits and decreased demand, this is an issue that we may see more and more in the coming years.