Case Study - increasing Apple's profitability.

Authors Avatar by foudz (student)

CENTRAL ISSUE

The central issue found in the Apples Inc. 2008 case study that we have chosen to address focuses on Apple’s own concerns with increasing its profitability and increasing the company’s market share. There are several key issues that contribute their dilemma and below we have listed the factors that are most prominent. Their gross income margins are dwindling even though they are showing rapid growth in the industry. Issues involved with the iPhone 3G and the launch of the MobileMe service. The economy within the United States was very unstable making it difficult to forecast the remaining quarterly profits of 2008. The company is facing stiff competition trying to gain new ground in the computer industry that is largely dominated by Dell and HP.

RECOMMENDED COURSE OF ACTION

Apple has lower market share than Dell and HP, HP and Dell dominate the majority of the computer market. Apple should find how to increase their market share. Apple should increase their retail presence by making their products available in more retail stores and locations and expand to more carriers if possible. Apple should work to make its products more compatible and increase the variety of their product line up.

SIGNIFICANT FACTORS

The key issues in the case relevant to our central issue are; 1) the need to include more actions to increase sale such as making products more accessible.  2) Also creating a differentiation-base advantage by differentiating and expanding Apple product line, appealing to a wider array of consumers with products at different price points. 3) Developing expertise and resource strengths by creating an alliance with select partners that can be used throughout the industry. 4) Focusing on the special needs of its consumers.

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JUSTIFICATION

Apple should expand their retail presence across a wider range of retailers. Apple’s iPhone is currently exclusive to AT&T customers. This limits the sales of iPhones that could be otherwise sold through other cellular carriers like Verizon, Sprint, T-Mobile, etc. The iPhone 3G was able to sell a million units in only three days, imagine how many more units will be sold if AT&T customers were not the only ones buying iPhones. Another way Apple could further expand the sale of their products is through big retail stores such as Wal-Mart, and Target. With the many locations these ...

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