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Apple Inc. in 2010
Apple Inc.’s case analysis focuses on the strategic decisions that Apple has pursued and examines how those decisions transformed Apple Inc from a PC manufacturer to a billion dollar mobile device company. A financial analysis of the company is provided to access its current financial health. Also, an external analysis of the company was conducted to understand the structural conditions of the industry and determine factors that affect its performance. Finally, an internal analysis was conducted to identify the resources and capabilities that Apple can leverage in order to remain successful within its industry. Based on the results of the analysis I recommended that Apple Inc. should make the iPhone available to all major U.S carriers in order to further leverage its strengths in the mobile phone market.
Apple Inc. is financially strong as reflected by its financial ratios, comparisons with major competitors, and continued growth. Its profitability ratios demonstrate that the company continues to have strong returns which are significantly higher than most of its direct competitors. For example, as seen in exhibit 1A, Apple's return in assets ratio increased from 17%, in 2008 and 2009, to 19% in 2010. On the other hand, its return in Equity decreased by one percent from 2009 to 2010. These ratios indicate that Apple was successful in increasing its return in total investments but not its return in total equity invested. However, this decrease shouldn't be of major concern to the company or its investors. As seen in exhibit 1b, with a 2009 ROA of .17 and ROE of .31 it is evident that Apple Inc obtains higher significant returns in both assets and equity than most of its competitors with the exception of Microsoft and RIM. Its numbers indicate that for every dollar in total investments the company obtains .17 in return and .31 returns in total equity invested. As a result, it can be concluded that Apple is earning above...
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