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Mgt 521 - Apple and the Economy

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Apple and the Economy

Dawnielle Dodaro


August 22, 2011

Phil Norris

Apple and the Economy

Apple, a well-known product today, has been around for many decades and struggled with the economy. Apple started back in 1976 where two college dropouts, Steve Jobs and Steve Wozniak, came up with the idea that would start a revolution on computers (hardware and software), handheld devices, and phones. In 1980, Apple decided to go public and the shares sold out within minutes. Over the next couple of years, Apple decides to reorganize its company and ousted Steve Jobs among others. Apple did not have the recognition that it needed until Steve Jobs came back in the mid-1990s. "Because of Jobs's restorative efforts, Apple exited the 1990s as a pared-down version of its former self, but, importantly, a profitable company once again" (Mismanagement--Crippling an Industry Giant: 1990s, para. 10). This company began in a garage and grew to one of the best competitive and innovative companies the world has seen today. Within this paper, Apple will face recent economic trends that affect the company, strategies the business used or could use for adapting to these economic changes, tactics the company implemented or could implement to achieve their adaptive strategies, and how the human resources management plays in helping the company reach their business goals. Toward the end of the paper, a discussion about whether or not to invest in Apple, Inc. is an intelligent decision as a mutual fund manager.

Recent Economic Trends

Recent economic trends are influencing Apple by making sure the company stays on its toes, reviewing how technology affects the mass (locally and globally), and influencing other companies for benchmarking. Apple must stay on their toes because this world is a competitive world. Many companies are striving for the top spot. Developing new ideas and products can keep Apple ahead of the competitive market. Kunzler (2011), "According to a very interesting post on Quora, Apple uses its massive pool of money to shop for and invest in new technologies so that they come to market years before they would otherwise have done so. Their strategy is to use cash (rather than credit) to gain exclusive access to various technologies, leaving their competitors in the dust" (para. 2). This is true. Most companies have tremendous debt compared to Apple. If Apple stays on this course, they will be the top dog for years to come.

Technology is advancing more quickly than a person can tie his or her shoes. Technology has spread over the globe and letting people reach out to others. Most people have a cell phone, laptop, or a handheld device that will help coordinate their daily activities and connect with the world. Apple rose to the occasion to provide these three to the mass market. Apple has yet to go global; however, they do have products in Europe and Japan. As previously stated, Apple is using their cash to stay ahead of the competition. They are always one up in the technological advances than other companies. With everything streaming on the Internet, Apple has a store that can provide consumers with an application to watch their shows, movies, news, etc. (Hulu, Netflix, ESPN, and Time Warner) on their products. Mossberg (2011), "Television programs, like music and books, are migrating from their traditional form of delivery to transmission over the Internet for consumption on computers, tablets and smartphones. A growing number of people, at least some of the time, are choosing to watch shows on these devices rather than on television sets" (para. 1). Therefore, Apple is the cool one of the technological world by always transpiring to be trendy among the others.

Companies have another company that they look at to possess the qualities of that other company to maintain a successful business. This is known as benchmarking. Benchmarking is "[c]omparing an organization's practices, processes, and products against the world's best" (Nickels, p. 218). Apple is the company that other companies look at when trying to push their company further. Apple's innovation keeps them leading in their industry. This company stays with the ever-changing economic trend by using their extra cash flow and put it toward new technological advances.

Adaptive Strategies

Since 2008, the recession has hit many people and businesses. Apple is one of the companies that took the recession head-on and captured consumers with their innovative ideas to keep their company prosperous. Caulfield (2009), "Over the past year, banks have collapsed, PC sales have fallen and unemployment has soared...Apple..., however, has thrived. Sales and earnings aren't down less than everyone else. They're actually up over the year-ago period. The result: Apple shares have more than doubled in value this year" (para. 1 and 2). Hence Apple has not taken a beaten from the economy; it strives and does better than the year before.

As mentioned earlier, one of the strategies that Apple has is retaining 60 billion dollars in the bank. Stakeholders and shareholders believe that they should receive some of the money in return of investment; however, Steve Jobs thought otherwise. Bajarin (2011), "Although there has been suggestion from stockholders that some of that should be given back to shareholders, Jobs and team have argued that they need it for acquisitions and other competitive issues" (para. 2). A competitive issue is mobile



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