Christopher Collins Business Information Systems Five Forces Analysis: Apple Computers 1. Threat of New Entrants The threat of any new entrants is very, VERY, low in Apple’s computer industry. Most computers today run on Windows and Apple’s Mac OSX systems. A new entrant would have to develop a competitive software that is more technologically advanced than Apple’s ever-changing software upgrades. It would require a massive amount of funds to be able to afford this.
This make it lucrative for companies to finance with internally generated cash, which is the most liquid asset. A drawback is that Apple earned a mere 0.77% on its cash and investments in fiscal year of 2011 [5]. The disadvantage is that the rate of return is close to the inflation rate. Apple has not debt and therefore no apparent reason to pile up cash, if they cannot invest it at a higher return than their current interest rate allows. Though another way of looking at it is that Apple is only waiting for the really good investments, and that opportunity offset the lost revenue of hoarding cash at a low interest rate.
That is one reason why I believe why apple is "better" than Microsoft, also because they have a much better way of marketing things. Think about how much money you get from games. Microsoft takes a little bit of the money from each game sale yet cannot out profit apple because their marketing isn't very good. Originally Apple only has 4 types of products on the market (iPod, iPhone, iPad, apple tv, iwatch and the mac) just like Microsoft (PC, Xbox, Kinect, and phone) yet apple does better because of the reasons listed above. Microsoft though, since it has a big chunk of market share as far as operating systems is concerned, is for hackers to mess with since 70% of all hacking tools is for windows only.
Executive Summary The primary intent of the financial analysis of Apple Inc. is to identify the profitability of the company. The objective of a company is to maximize the value of the firm which is measured by the present value of the firm’s future net earnings. The stock price is the most visible public indicator of the company’s ability to procure future earnings. Apple Inc. has consistently beaten analysts’ forecasts and its stock has been consistently prominent on the Nasdaq. Although Apple is notorious for its financial success the true performance indicator is its ability to innovate.
The buyback can lead to increase in value of its shares and ultimately the wealth maximisation of its shareholders. As many technology companies are coming up with their cloud services, Apple has to build on its iCloud services. Cloud service has a huge growth potential in the future as more and more businesses and startups find it economical to use cloud services which leads to savings on server hardware spending. It has to face intense competition from the likes of Amazon, Microsoft and Google which already have an in house talent pool to scale their services. Apple can do well to acquire growing cloud service company since cloud is clearly not its core competency.
P.2 mentions that OEMS would an “upwards of 1%” premium for superior reliability, which Samsung surely offers, but that’s only 1% (5-6 cents), not 14.5%. Maybe Samsung’s reputation premium is much higher. That could be the case because memory chips are an experience good, i.e. a good whose quality
There was not one dominant player within the industry; they were more equally balanced thus increasing rivalry. The High fixed cost for running a discount store resulted in an economies of scale effect, this can be seen when Wal-Mart decided to gain economies of scale by building their own distribution centres to add value. Going public in order to finance the extra storage was important for Wal-Mart to utilise capacity as efficiently as possible, they did this by creating distribution hub around 15-20 stores. The increased rivalry continues, this was due to the low levels of product differentiation and little in the way of own branding, products were standard in nature through all discount stores. Also the low switching cost and consumer awareness of shopping around to find the best bargains increased competition around stores to capture customers.
On the other hand, Nokia, one of Ericsson’s main competitors, were pro-active in dealing with this risk and this helped them prevail over Ericsson in the smartphone market. This paper discusses in detail about the pure risk faced by the firms, how they handled this disruption and what happened as an end result. This paper also discussed how Ericsson could have prevented this loss and how its risk management processes got changed after the incident. Company Background Ericsson was Sweden's largest company, with annual revenue of more than $24.6 billion at the end of fiscal year 1999 (Latour, 2001). In 2000, Ericsson had a 12 percent market share in the cell phone market and sold 43.3 million cell phones across the whole world, making it the world’s third largest mobile phone producer just behind Nokia and Motorola.
RE: Assessment of Dell’s Business Risk The purpose of this memo is to assess business risk related to Dell, Inc. which includes establishing factors that would affect the profitability of the company and the potential of material misstatements. Considering the fast-track innovation trend in mobile computing and low barriers to entry, the competition among existing firms is high. In fiscal year ended February 2012, Dell derived 80% of its sales revenue from its three commercial customer segments. Increasing competition from the likes of Apple and HP has also eaten into Dell's market share and impacted its long-term strategy. Dell is dedicating its resources into aggressive acquisitions to keep up with technological advancements such as cloud computing and tech infrastructure.
Computed by deducting the cost of capital from the after-tax profit, it is said to be the best measure of the true profitability of an enterprise because it is tied to cash flow and not earnings per share. Many analysts would agree that EVA is more positively associated with a company’s stock price than ROE or EPS. Keith confirmed his findings with an industry analyst, which posed him with the decision of whether of not to implement this calculation into OSI accounting practices. Furthermore, would it be a beneficial tool to be used for evaluating the new manager’s incentive compensation plans? The EVA trend seems to be almost mandatory for the larger companies, but there is no reason that it shouldn’t work just as well for their smaller firm.