Apple is launching the iPad tablet to capitalize on the growing tablet market. The iPad will leverage Apple's strong brand perception and reputation for quality and innovation. It will integrate with the established iTunes ecosystem. However, Apple faces threats from strong competition from Android and other tablets, as well as skepticism about the need for a tablet. Apple will market the iPad's simplicity and content consumption capabilities. It will be priced accessibly at $499 while still providing Apple's typical large profit margins. Extensive promotion and an online and retail store distribution strategy will be used to launch the iPad globally.

1. Apple iPad
“A magical and revolutionary device at an unbelievable price”
Group Project
Management Of Organizations
Instructor: Professor Katsikeas
Vasiliki Chatzivasileiou
Zoi Karakosta
Danai Sbrini
Stathis Simeonidis

2. COMPANY PROFILE
“To be a leader in providing simple, powerful, high-quality information products and services
for people who learn, communicate, and create”
Vision
“Our mission is to bring the best personal computing experience to students, educators,
creative professionals and consumers around the world through its innovative hardware,
software and Internet offerings”
Mission
Apple Inc designs, manufactures and markets a range of personal
computers, mobile communication and media devices, and portable
digital music players
Leading
Products
Mac iPod iPhone iPad
Apple
tv

3. HISTORY OF APPLE
1976
2011
Apple Computer is founded by
Steve Jobs & Steve Wozniak
1980
Apple goes Public after releasing
the Apple II
1984
1985
The Macintosh, an all-in-one
PC is introduced Steve Jobs leaves the company
after being forced out by the
board
1989 The first portable Macintosh
is introduced
1997
Steve Jobs returns to Apple and
retakes the CEO Position
Apple hits financial trouble after stiff competition from the PC industry
1998
Apple iMac is introduced,
a huge commercial success
2001 The iPod is introduced --
Apple redefines the digital
music industry2003 iTunes Music store opens
2007
2010
Apple “reinvents” the phone
by introducing the iPhone
Apple ushers in the tablet era
and redefines mobile
computing with the iPad

4. BUSINESS DOMAIN
10%
Worldwide
Market Share
$43.5
billion
$ 65.2
Billion
(+52%)
Revenue
2009 2010
21%
U.S.
Market Share
Americas: 37.6 %
Europe: 28.7 %
Japan: 6.1 %
Asia & Pacific : 12.7 %
$25.1 b $8.2 b $4.9 b $2.5 b $6.2 b $4.9 b $11.2 b
+93.2% +2.3% +22.6% +6.7% +43.4% - +18.3%
Revenues
Perprodutline

5. KEY SUCCESS FACTORS
Simplicity
Design a full experience
Passionate customers
Sell at a premium
Cross-sell the product line
Element of surprise

6. PRINCIPLES
Simple is also effective
We don’t follow our customers - we lead them
We are our self’s toughest critic
We create new needs
We focus on every detail of user experience
We always think different, think what’s next

7. A NEW CATEGORY
Tablet

8. Political & Legal
Patent dispute with other
manufacturers / competitors
FoxConn suicide cases in China plant during
iPhone production
Supplier Code of Conduct must be
endorsed and according to domestic
laws
Environment & import polices worldwide could
affect sales in developing countries (e.g. BRIC)
Economical
Recession / Global economic crisis affects
customer’s buying capability
Customers are price-sensitive - price must
be affordable
Exports & currencies fluctuation can affect
profits
High expectations due to more educated
customers
Socio-Cultural
Intersection of technology & liberal
arts
Wider target audience not familiar with
computers need
Customer cultural diversity Declining trust in businesses and multinational
companies
MACROECONOMIC FACTORS

9. Technological
Netbooks are already popular Battery technology does not evolve in the same pace
System On a Chip is an
emerging technology
Multi-touch technology recently introduced and
adoption in large scale is unknown
Many standards of wireless
connectivity
Tablets were perceived as an expensive product only
for business uses
Environmental
Toxic substance removal (no
toxic substances at all)
Smaller Packaging of products leads to less
waste
Responsible manufacturing
(Supplier code of conduct)
Product recyclability and longer product
life leads to smaller carbon footprint
MACROECONOMIC FACTORS

10. PORTER’S FIVE FORCES MODEL
Direct Competitors
Indirect Competitors
Creator of the Android 3.0
platform for tablets
Creator of the upcoming
Windows 8 OS specialized
for tablets
Samsung GALAXY TAB
Small screen size, OS not
optimized for tablets.
Affordable price at cost limit
Motorola XOOM
Expensive ($ 799), OS not
100% ready yet. Price is
very high
Amazon KINDLE FIRE
No storage, data in the cloud
Low comparative price
Smaller Screen
HP TouchPad
Similar price & screen size but
OS not 100% ready. Rushed
to the market early
RIM PlayBook
Small screen size but OS not
ready at all, needs a
BlackBerry to fully utilize it

11. Functionality is of vital importance & minimizes consumer’s ability to bargain
iTunes ecosystem (apps, music & videos) locks-in the consumer
Fan Base / extremely wider audience and versatility in use cases (students to seniors)
Simplicity and small learning curve (easy to use)
Threat of new entrants
Apple is not manufacturing but only designing the iPad
Possible Cost-Aggressive entry by some of our suppliers (e.g. Samsung) or Assemblers (e.g. FoxConn)
“ ..but we are more than one year ahead & have strong brand name “
Suppliers’ bargaining power
The whole design is made in-house for hardware and software so suppliers have a very simple job.
Major supplier is a specialized assembler (FoxConn)
Some suppliers are already competitors (e.g. Samsung)
Buyers’ bargaining power
PORTER’S FIVE FORCES MODEL (cont.)

12. Risk of substitutes
Smartphones
 Higher mobility
 Phone & texting capability
 Camera & video capabilities
Netbooks
 Price
 Wider range of buying options
 No learning curve
 Popular due to the crisis
Notebooks
 Full Capabilities
 Much wider range of buying
options
 Bigger Screens
 Extensibility
eBook Readers
 Cheaper
 Easier for reading under
sunlight conditions
 Already popular
 Only for book reading
PORTER’S FIVE FORCES MODEL (cont.)

13. SWOT ANALYSIS
Strengths
Brand perception & advertising
Good reputation
Strong leading Team
Focus on detail, quality & reliability
Constant Innovation & frequent upgrades
Established Ecosystem
Opportunities
Creates a new Market
Constant Market Growth
International Reach
Loyal Customer Base
Increasing demand for online content
(Music, Videos, Books)
Weaknesses
Price of Apple products
Initial Lack of functionalities:
(USB, Camera, OS Multitasking)
The big cost of constant R&D
Proprietary / Closed Software
Threats
Intense Competition (e.g. Android)
Financial & Political instability
Plethora of substitutes
Initial Skepticism
Good Ideas are easily copied

14. COMPETITIVE STRATEGY PURSUED
Balance of mobility and function
Daylong Plus Battery Life (10hrs, 1 month stand-by)
Content Controllability
Innovative Design (An Integrated System)
Familiarity due to similar software with iPhone
Service Advantage (Apple Care Protection Plan , Genius Bar Support)
Perceived status for owning an Apple product

15. MARKETING STRATEGY
Superior Quality
Reliability
Friendly and almost intuitive to use
Cutting-edge Design
Low Cost And Effectiveness
Usage Both For Professionals And Young Customers
Many use cases that will be promoted
(medicine, [special] education, advertising booths, exhibitions-galleries etc)
iPad will be marketed as
a product of:

16. PRODUCT
More capable More intimate
iPad
…than a smartphone …than a laptop

17. Newspapers and Magazines will use iPad
for content consumption / distribution
TV commercials developed by
Apple marketing department
Keynotes to the press and media
PROMOTION
Product placement in big & small screen
Extensive media coverage
(specialized sites and magazines only for Apple)

18. PLACE
Directly from Online Apple Store
(phone orders included)
From the chain of 357
Apple Retail Stores
From a network of resellers
and worldwide partners

19. PRICE
By outsourcing the assembly and using cost efficiencies
we believe we have hit the sweet spot
between price and quality
$ 499
For the base version
$110
Source: iSuppli
$90
$70
$230
+Apple Margin
Average Industry Margin
Cost of Sales
Cost of materials and
manufacturing
40%

20. R&D
Incorporation of front and rear end cameras to the next iteration
Connectivity issues: USB for camera
SD Card reader
HDMI output is standard between our competitors
Weight reduction without compromising battery life
Improve readability in sunlight
OS development in close sync with iPhone
Books & Magazines buying capability to keep up with eBook growth
Expand gaming capability (single, multi & on-line)
Multitasking must not bring down battery life
Set-Up, sync and use must be distanced from PC & iTunes
Challenges in Hardware
Challenges in Software

21. HUMAN RESOURCES
Support employees throughout their careers
Constant training and education philosophy
Commitment to diversity
- Celebrate diverse experience
- Incorporate diverse experience of employees
- Work with diversity network associations
Generous employee discounts for Apple products
Competitive and personalized benefits package

22. SUPPLY CHAIN
High integration with suppliers allows for higher customization
High volume equals big discounts on parts & assemblies costs
Control on every piece of supply chain from design to retail stores
Lock competitors out of the supply chain (e.g. HTC)
Effective transportation methods (e.g. air freight)
Tightly orchestrated process during new launches
Design Procure Assemble Deliver Sell

23. INFORMATION SYSTEMS
Detailed order tracking
Many channels for order taking (online, telephone, etc.)
Pre order through retail stores and internet
Credit card processing requires sophisticated security
Employees have access to unified information
Established Extranet with all Suppliers
Suppliers
Assembler(s)
Retail Stores

24. FORECASTS
0
50
100
150
200
250
300
350
2009 2010 2011 2012 2013 2014 2015
Millions
Others
iPad
Global media tablet shipments now are expected to rise to 60 million units in 2011,
up 245,9 % from 17.4 million in 2010 and expected to reach about 300 million in 2015.
Source: iSuppli

25. FORECASTS
$-20
$-
$20
$40
$60
$80
$100
2009 2010 2011 2012 2013 2014 2015
Billions
Break-even
at early 2011
Price levels to remain
the same
Cost per unit to
decline until 2013
Year Production Sales Average Price
Cost of Sales
per unit
Profit
per unit
2009 15m 0 $550,00 $300,00 $250,00
2010 50m 15m $550,00 $300,00 $250,00
2011 100m 60m $550,00 $290,00 $260,00
2012 110m 80m $550,00 $280,00 $270,00
2013 120m 120m $550,00 $280,00 $270,00
2014 120m 140m $550,00 $280,00 $270,00
2015 120m 160m $550,00 $280,00 $270,00
Annual
product update cycle
must continue at the
same pace

26. IMPLEMENTATION
Potential Implementation Barriers after launch
Third party sellers lack of faith & training for promoting the product
(extensive training and material access to third party retailers)
Stock out issues due to high demand
(form teams with extra budget to solve the issue)
Possible defective products
(emergency stocks – immediate and priority replacing )
Difficulties to forecast regional demand might lead to customer frustration
(phased launch per country/region)

27. MONITORING & CONTROL
Order tracking per customer at all stages
Track demand, sales and pre-orders by the store and by the hour
and adjust forecasting daily
Own retail stores lead to operational advantage
direct and detailed process information
Regular meetings of regional sales managers
(more frequent during launch and scheduled later)
Assign specialized account managers to key third-party suppliers

28. Q & A
Group Project
Management Of Organizations
Instructor: Professor Katsikeas
Vasiliki Chatzivasileiou
Zoi Karakosta
Danai Sbrini
Stathis Simeonidis

29. STRENGTHS
Brand perception
Strong past sales have developed Apple as favourable brand.
Good Reputation
Apple has managed to create a huge fan club through its high quality products, something that
led the company to the top
Apple has a very creative and strong leading team that cooperates really well
Strong leading Team
Apple gets to set the specs in detail and delivers its products through a controlled retail
experience (Apple Retail Stores) that helps them explain the value to the customer and
extract a premium for that value
Focus on detail, quality and reliability
Constant Innovation & Frequent Product upgrades
Established Ecosystem
iTunes & App Store as a business model for online media & mobile applications.
Apple frequently updates its products and even more frequently updates the software for them.

30. Price of Apple Products
Initial Lack of Functionalities
Constant R&D yields high costs
Proprietary and Controlling
Apple’s products are highly priced in the personal computer market, and that has created a
perception (e.g. Apple Tax).
WEAKNESSES
USB to hook devices directly, cameras for video conferences, OS Multitasking (running multiple
applications at the same time)
In order to compete at the top and remain as a leader there is a need for constant
R&D which takes up resources compared to its competitors (Dell, etc)
While this keeps design control inside and up to standards, it has hurt wide
adaptation of Apple hardware, especially computers, where we have a relatively
small market share.

31. OPPORTUNITIES
Create a new market
Market growth is constant
International and wider reach
Loyal Customer Base
Increasing demand for online content (music, videos, books)
A new market is always a “greenfield” that the leader can handle as he likes
All products are easy to use, almost intuitive – specially iPad can be used by practically all ages
and all nationalities making it available to a wider range of consumers
All surveys and researches show a rapid growth of the tablet market with more to come
into the enterprise sector.
Each new product implements appealing new features, strongly inducing the ever-expanding
loyal Customer base to buy new products

32. THREATS
Strong Competition
Financial Instability
Plethora of substitutes
Initial skepticism for the product
Good ideas are easily copied
Apple is facing tough competition in todays global oligopoly as industry is being influenced
by many major competitors such as Nokia, Dell, Google, RIM, etc.
The global financial instability prompts customers to postpone buying any electronics
product which is considered a luxury in some communities
Alternative products and substitutes affect the sales of iPad due to their lower price
Customers initially questioned the need of a tablet considering the big popularity of
netbooks and notebooks
Other competitors adapt to our tested practices such as multitouch, applications
store, music-video store etc.