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A P ROJECT REPORT ON

Apple and HCL Submitted to: 

Prof. Rakesh  Gupta  -Abhishek Shahi Sha hi (FT-09-706) (FT-09-706) -Anu Gupta (FT (FT-09-727) -09-727) -Krutika Doshi(FT Doshi(FT-09-765) -09-765) -Saumya Chaturvedi(FT Chaturvedi(FT-09-884) -09-884) -Shivam Behl (FT (FT-09-852) -09-852) -Vipan Kumar (FT-09-877)

Section-B

Submitted By:

PGDM: 09-11

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Ackno cknow wled ement  ent 

With profound sense of gratitude and regard, we express our sincere thanks to our guide and mentor Prof. Rakesh Gupta, for his  valuable guidance and the confidence he instilled in us, that helped us in the successfu  completion of this project report. Without his  help, this project would have been a distant  affair. His thorough understanding of the subject  and the professional guidance was indeed o  immense help to us.

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Table of content  Page Number 

1. Executive Summary 2. Introduction of Apple 3. Vision & mission of Apple 4. Introduction of HCL 5. Vision & mission of HCL 6. Value chain Analysis 7. Porter’s Five Force Analysis 8. SWOT Analysis of Apple 9. SWOT Analysis of HCL 10. PEST Analysis of Apple 11. PEST Analysis of HCL 12. Bibliography

4 5 9 10 13 14 17  19 22 23 24 26

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EXECUTIVE SUMMARY This study was taken up for analyzing Apple Inc., which was started by Steve Jobs st and Steve Wozniac on April 1 1976. Since then the company has gone on to become a $32.48 billion enterprise and is ranked 71 st in Fortune 500, as in 2008. OBJECTIVES OF OUR STUDY •

To present a detailed study of product range of Apple Inc.



Discuss company’s vision & mission, Core competency, SWOT analysis, PEST analysis, environmental scanning.



Comparative analysis with HCL Infosystems of India, which again was founded by Shiv Nadar in 1976.

HCL was taken up for comparison because it’s a growing company and has a similar product portfolio as of Apple. HCL started in 1976, similar to Apple and therefore gives us ample comparison data. HCL has a good domestic presence in India while Apple has a strong global presence and that is why we could easily compare it through tools like SWOT, PEST, etc..

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I for Innovation Apple with its core competency of designing computing devices with exceptionally elegant ease-of-use is a firm well known to every geek on the planet. Making a mark in innovation and technology Apple is all set to eat out on the computer market share worldwide. The company has impressive revenues of $32.48 billion in 2008 and a mindboggling profit of $4.83 billion Apple surpassed its previous records. From being the most admired company in the US 2008 it went on to became the most admired company in the world in 2009. The key to Apple customer base is brand loyalty and dedication towards the brand. Apple serves in over 250 locations in 10 countries and has an ever expanding product line. The firm synonymous with success today had a bumpy past that needs to be looked upon. History 

The year 1976 saw the emergence of the company, Apple. Three men Steven Paul Jobs, Steve Wozniak and Ronald Wayne started the firm on 1 st April 1976 just rd about an year later on January 3 1977 the company was incorporated as Apple Computers inc, by this time Ronald Wayne sold his stake in the firm .Steve Jobs too shared his piece after being removed from his managerial duties in 2005 and resigning later. Apple continued to progress till 1993 based on some successful products such as the Macintosh portable and its operational language LOGO. As Microsoft Corporation grew post windows Apple started facing the heat and revenues slumped and so did the sales. The bad shape of the company was evident till an old helping hand offered to bring it back on track, Steve Jobs was made the CEO and the innovation factor returned. Revenue Sources

Apple has used the term innovation to the fullest. Offering a range of products and continuing to generate sales from them even after the product is sold. A concept not new, but never been utilized so efficiently.

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Apple Hardware product Range varies from

The MAC mini, small and powerful MAC that offers a superior performance introduced in 2005 that acts as a server /Desktop.

The MacBook offers a whole new experience in computer usage. With innovative features and state of the art technology, Apple created a tsunami by bringing out a product of biblical proportions.

The I-pod launched in 2005 tapped in the music industry, with no competition to slow its pace, I-pod grew and became the gadget of the next generation, no sizable competition has emerged in front of the I-pod even after 5 years of its inception.

The latest entrant into the Apple product line, turned the mobile market upside down with its launch in 2007 and went on to become the major source of income for Apple and went on to become to be called the mobile that killed all. With touch screen platforms and sensitivity that no other phone managed to engrave, Apple patented the technology removing competitive threat for years to come.

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Software Product Range

Launched primarily as a music player, it went on to become a $ magnet when an application the itunes store was launched for application regarding ipods and iphone. The Apple itunes now holds the largest chunk of the music industry in USA and follows a strategy of buying the competition before it becomes a threat.

The Next generation of Operating systems offered with all macintosh computers and independently is a major source of  income and appreciation for the company.

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Re venue venue chart for Apple 2008 vs. 20 099 2009 4.02 6.59 37.72

18.49

Mac iPod iTunes

11.05

iPhone Peripherals

22.14

Software

2008 5.11 5.68

6.8 43.95

10.28

Mac iPod iTunes iPhone

28.18

Peripheral Software

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 VISION & MISSION OF APPLE Vision Statement

"Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them." Explanation of vision

Apple lives this vision through the technologies it develops for consumers and corporation. It strives to make its customers masters of the products they have bought. Apple doesn't simply make a statement. It lives it by ensuring that its employees understand the vision and strive to reach it. It has put systems in place to enable smooth customer interaction. It has put objectives in place to continuously move forward; implemented strategies to fulfill these objectives; and ensured that the right marketing, financial and operational structures are in place to apply the strategies. Mission Statement

“Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and internet offerings” QUALITY POLICY We shall deliver defect free products, solution and services to meet the requirement of our internal and external customers. CORE VALUES    

We shall uphold the dignity of individual We shall honor all commitments We shall be committed to quality , innovation and growth of every endeavor We shall be responsible corporate citizen

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HCL INFOSYSTEM Introduction HCL (Hindustan Computers Limited) is a leading global Technology and IT enterprise whose range of services spans Product Engineering and Technology Development, Application Services, BPO Services, Infrastructure Services, IT Hardware, Systems Integration, and Distribution of Technology and Telecom products in India. The HCL Enterprise comprises two companies listed in India: HCL Technologies and HCL Infosystems. HCL Technologies is the IT and BPO services arm focused on global markets, while HCL Infosystems deals in the IT, Communication, Office Automation Products & System Integration arm focused on the Indian market.

Founder and history

Shiv Nadar is the founder of HCL. He founded HCL in 1976 in a Delhi "barsaati". In 1978, HCL developed the first indigenous micro-computer at the same time as Apple and 3 years before IBM's PC. In 1980, HCL introduced bit sliced, 16-bit processor based microcomputer. In 1983, HCL Indigenously developed architecture, at the same time as global IT peers. In 1986, HCL became the largest IT Company in India. In 1988, HCL introduced fine grained multi-processor Unix-3 years ahead of "Sun" and "HP". In 1991, HCL entered into a   joint venture Hewlett Packard and HCL-Hewlett Packard Ltd. was formed.In 1997, HCL Infosystems was formed. In the same year HCL ventured into software services. In 1999, HCL Technologies Ltd issued an IPO and became a public listed company. In 2002, software businesses of HCL Infosystems and HCL Technologies were merged. In 2005, HCL set up first Power PC architecture design centre outside of IBM. In the same year HCL Infosystems launched sub Rs.10, 000 PC. In 2006, HCL Infosystems became the first company in India to launch the New Generation of High Performance Server Platforms Powered by Intel Dual Core Xeon 5000 Processor. Leveraging its 30+ years of expertise in total technology solutions, HCL Infosystems offers value-added services in key areas such as system integration, networking consultancy and a wide range of support services. HCL Infosystems is among the leading players in all the segments comprising the domestic IT products, solutions and related services, which

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include PCs, servers, office automation, networking products, TV and FM broadcasting solutions, communication solutions, system integration, digital lifestyle solutions, and peripherals. The company has core competence in technology creation and

distribution, and therefore it is able to decide what the customer needs are and how those needs can be satisfied by producing and delivering the desired products/services effectively. HCL Infosystems focuses on the ever-growing segment in Imaging, Telecom and Communication products solutions and services. Now it has an exclusive sale and support partnership with Toshiba Corporation, Japan, for sales and servicing of its imaging and photocopier products. HCL Infosystems product portfolio covers a range of other office automation and communication products through alliances with world leaders. HCL Infosystems Ltd, with annual revenue of US$ 2.7 Bn (Rs.11,855 crores) is India’s premier information enabling and ICT System Integration company. The competitors of HCL Infosystem are HP, Dell, Acer, Wipro, IBM Lenovo, Apple. Companies’ strengths can be summarized as:  Ability to understand customer's business and offer right technology  Long-standing relationship with customers  Pan India support & service infrastructure  Best-value-for-money offerings

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Headquarters and Br nches

MANAGEMENT HIERARCHY LEADERSHIP

Shiv Nadar Founder HCL, Chairman and CEO HCL Technologies

Ajai Chowdhry Co-Founder HCL, Chairman and CEO HCL Infosystems

J V Ramamurthy Chief Operating Officer HCL Infosyst ms Ltd

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 VISION & MISSION OF HCL VISION STATEMENT

"Together we create the enterprises of tomorrow" MISSION STATEMENT

"To provide world-class information technology solutions and services to enable our customers to serve their customers better" QUALITY POLICY

"We shall deliver defect-free products, services and solutions to meet the requirements of our external and internal customers, the first time, every time"

OUR OBJECTIVES OUR MANAGEMENT OBJECTIVES

To fuel initiative and foster activity by allowing individuals freedom of action and innovation in attaining defined objectives. OUR PEOPLE OBJECTIVES

To help people in HCL Infosystems Ltd. share in the company's successes, which they make possible; to provide job security based on their performance; to recognize their individual achievements; and help them gain a sense of  satisfaction and accomplishment from their work.

CORE VALUES •







We shall uphold the dignity of the individual. We shall honour all commitments. We shall be committed to Quality, Innovation and Growth in every endeavour. We shall be responsible corporate citizens.

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 VALUE C  AIN AIN ANALYSIS ANALYSIS OF APPL

Fir

Infrastructure HRM

Technology Development Procurement

Inbound Logistic

Opreati ns

Outbound Logistic

Marketing /Sales

Services

Apple has been able to pe fect the chain of activities in innovatio . Apple starts from its new ideas of prod uct design, designs it through its own resources and funding, then manufacturin g it and finally markets it wholeheartedl . Technology and product de sign

It is the most important of  value chain of apple. It spends 6% of it total revenue in Research and develop ent. It was first to provide platform for electronic spreadsheet. Apple has a glorious in technology and develop ment. Apple’s operating systems have b een recognized as most trusted O/S . Through his innovative technology appl has been able to develop iPod, iTunes and iLife suite of products.

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Suppliers

Apple develops all of required components by itself. Company has done backward integration in all the sections barring Microprocessor. In starting the supplier for Microprocessor was Motorola, then IBM and now Intel. Production

Hardware and software developed by apple were later used by it for production process. Though some component was purchased for production of iMacs, its 64bit architecture, integrated distinctive styling, and redefined intuitive operation with the iPod are known for their high performance. Through extensive research and development its product likes Mac achieved extraordinary performance. Distribution

At first apple opened small shops. In 1997 it spread all across the nation by launching its web-site. In 2002, 41% of total sales of company came from online purchase. First store was opened in Virginia, in 2001. Till now company has opened 135 stores all across the world. Marketing and Advertising

To attract its customers Apple used distinctive marketing campaigns. It used television commercials, Print Advertisements, Posters for promotion. Apple enjoys market premium for producing a better mousetrap throughout its history. TBWA chiat/day was hired by apple to design the campaign of “Think Different”. Customer Service

Faith of customers is a great asset for the company. Its customer service is very strong. Through its stylish products Apple is constantly meeting the expectation of  customers. By providing better quality and high performance product to the customers it has been satisfying customers and building trust.

Low

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threats of  new entrants

Moder -ate

High

bargaining power of  suppliers

current competition: very intense

bargaining power of  customers

threat of  sustitute products

high

Porters ive forces of PC market in india Threat of new entrants:

A PC maker does not requi e very high investment because the pa ts of desktops are procured from other m anufactures most of the unorganized as semblers does this thing the entry barrie for this industry is have entered in In dia they have huge pool of resources resu lting a tough competition is made the In dian economic very turbulent. Threat of substitutes:

Technology changes very ra pidly in this type of industry. The prod ct life cycle is very small therefore no o ne can guess when the current tech ology will be outdated.

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Bargaining power of buyers:

Every organization whether government, public or private is going for computerization hence they require PCs in bulk so they have high bargaining power. Individual customers are also there but they have low bargaining power results. Bargaining power of suppliers :

Supplier also have moderate bargaining power as the number of players are less manufacturing requires heavy investment, so PC makers. Rivalry among the existing players:

Since the margin in this sector especially, laptops therefore, this sectors have many players. And presences of many players create a cut throat competition among players and because of tough rivalry the amount of margin are going lower day by day.

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S WOT WOT ANALYSIS OF APPLE •

STRENGTHS 

Brand is all-important. Apple is one of the most established and healthy IT brands in the World, and has a very loyal set of enthusiastic customers that advocate the brand. Such a powerful loyalty means that Apple not only recruits new customers, it retains them i.e. they come back for more products and services from Apple, and the company also has the opportunity to extend new products to them, for example the iPod.



Apple is a very successful company. Sales of its iPod music player had increased its second quarter profits to $320 (June 2005). The favorable brand perception had also increased sales of Macintosh computers. So iPod gives the company access to a whole new series of segments that buy into other parts of the Apple brand. Sale of its notebook products is also very strong and represents a huge contribution to income for Apple.



Simple, easy-to-use design and concise product range attract customers.



Product integrations (all their products connect/work with each other)



WEAKNESSES 

Limited product range, especially absence from low-end desktop and netbook markets, limit potential market saturation and alienate some potential buyers. While many users will buy used Macs, Apple receives no profit from resale of used goods.



High Cost: can build a much better speculated computer for the same price or even hundreds to thousands less in most situations



Application support is still incredibly limited: most users still will not be able to "only" run Mac OS and will find they still need Windows applications quite a bit.

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Non upgradeable. What you buy is pretty much what you're stuck with unless you're looking at the Mac Pro, and even that has its limitations, as it only supports about 4 graphics cards and none of  them are the best available.



Closed off eco-system, while being great for limiting itself to viruses, also means the user has little control of the system for customization.





There is pressure on Apple to increase the price of its music download file, from the music industry itself. Many of these companies make more money from iTunes (i.e. downloadable music files) than from their original CD sales. Apple has sold about 22 million iPod digital music players and more than 500 million songs though its iTunes music store. It accounts for 82% of all legally downloaded music in the US. The company is resolute, but if it gives in to the music producers, it may be perceived as a commercial weakness.

OPPORTUNITIES    



Poor public perception of Windows Vista allows Apple to push OSX as an attractive alternative option for users. Success of Apple iPhone is a viable stepping stone for Apple to attract new users who previously had not owned an Apple computer. Branching out and working with more developers for more application support without the need of Windows. Providing better warranty support. Apple's warranty purchase plan is only for 90 days standard service compared to everyone else at 1year. Apple has the opportunity to develop its iTunes and music player technology into a mobile phone format. The Rokr mobile phone device was developed by Motorola. It has a colour screen, stereo speakers and an advance camera system. A version of Apple's iTunes music store has been developed for the phone so users can manage the tracks they store on it. Downloads are available via a USB cable, and software on the handset pauses music if a phone call comes in. New technologies and strategic alliances offer opportunities for Apple.

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Podcasts are downloadable radio shows that can be downloaded from the Internet, and then played back on iPods and other MP3 devices at the convenience of the listener. The listener can subscribe to Podcasts for free, and ultimately revenue could be generated from paid for subscription or through revenue generated from sales of  other downloads.

THREATS 



The biggest threat to IT companies such as Apple is the very high level of  competition in the technology markets. Being successful attracts competition, and Apple works very hard on research and development and marketing in order to retain its competitive position. The popularity of iPod and Apple Mac are subject to demand, and will be affected if  economies begin to falter and demand falls for their products. Global economic situation is likely to reduce demand for higher-priced consumer items. Since Apple offers no lower-end alternatives, consumers will switch to other manufactures in the face of falling incomes.



Windows 7 seems well-poised to correct many of the flaws of Vista and offer a "clean slate" for public perception, discrediting one of Apple's major selling points (i.e., that it's not Vista).



There is also a high product substitution effect in the innovative and fast moving IT consumables market. So iPod and MP3 rule today, but only yesterday it was CD, DAT, and Vinyl. Tomorrow's technology might be completely different. Wireless technologies could replace the need for a physical music player.

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S WOT WOT ANALYSIS OF HCL •

STRENGTH 

  •

WEAKNESS   



One of the key weakness of HCL is that it has lost projects in continuation like recently BFSI cuts projects. Total asset turnover is one of the weakness of HCL as they have always failed to materialize their assets in right direction. Lack of innovation and distribution network especially in case of laptops has reflected HCL’s weakness.

OPPORTUNITIES 

 



Wide Range of Products and Services like Bpo’s, Software Services, Infrastructure Management which cater into both large and medium size companies. Global Coverage in countries like U.S, Europe, Japan etc. Support sales activities by understanding the customer business better.

Acquisitions:- HCL has already done 3 major acquisitions like Liberta. This enables them to expand and create opportunity for them to widen their spectrum. Key opportunities lies in the countries like Eastern Europe and APAC (Asia-Pacific Region). Mid Market segment is the opportunity area as against Fortune200 companies.

THREATS   

One of key threat for HCL and the industry as a whole is the ban of  outsourcing from India due to new regulations from U.S Dip in quarterly Sales by 5% can lead to loss of market share and product depreciation. Small Players and manufacturers are trying to enter into the segment where they can provide much cheaper products than HCL which will be a rising competition for HCL to withstand.

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PEST ANALYSIS OF APPLE

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PEST ANALYSIS OF HCL Political 1. Tax rates in India for the hardware sector are 20%-30% plus which creates obvious possibilities for the further reform and faster growth. 2. 10 Year Special Economic Zones programs and tariffs change to promote the hardware production. 3. 26 new projects as a part of a national EGovernmentPlan. 4. Tax initiative by government to ask state government to fix VAT at 4% in the hope of attracting investors. 5. Manufacturing Associations of IT (MAIT) an Electronic Industry Association of India (ELSINA) are also pressing for reduction in land acquisitions rights by stamp duty exemptions.

Economic 1. In last 18 months there is growth in sales in PCs and computer hardware, mainly due to lower prices. But as per the trade cycle rotation there will be a possible slowdown in demand. 2. IT plays an important role in bringing 50%of rural household to the banking innovation. 3. IBM, Dell, Lenovo has announced new investment to expand capacity. Compound Annual Growth Rate is 15% between 2005 and 2010. 4. Due to the depreciation of the Rupee in comparison to Dollar the software and outsourcing has suffered negatively due poor exchange rate. Industry contributes up to 7% in GDP.

Social 1. 2. 3. 4.

Only 1.3% of people in India own a computer. Age Distribution 45% of the population is under 25. Regional imbalance and low incomes. Inward Investment can lead to better job opportunities. Still abroad is the fascination among the IT professionals to work. 5. IBM, Wipro and Infosys recruit 15000-20000 graduates each year.

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6. Business practices varies region wise.

Technological 1. Plans by AMD to set up the country’s 1st chip fabrication (an investment up to US$3bn) to stimulate local production and lower prices. 2. Multimedia features and Entertainment to bring bollywood among the masses. 3. Lenovo to build in TV tuner cards capable of connecting to a TV antenna. 4. During the year Satyam entered into an agreement with US based G-LOG, to offer a supply chain management and supply chain execution solutions to its customer.

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CONCLUSION Why Apple sliced the pie

HCL computers and Apple computers both were started in 1976, there is a specific reason as to why HCL has revenues of $5 billion and Apple has revenues of over $32 billion. HCL catered to the Indian market which till the 90’s was not that friendly with IT, Apple on the other hand grew in a market that was much more mature to the realm of computers and faced very little competition till 1993 .This was the time when some support from the UP government and some combined study with McKinsey made the firm adopt the policy of globalization but got a mixed response in almost every foreign market in ventured into. Holding strong HCL still managed to make its presence felt in the far east, Europe, Singapore and the USA. Apple on the other hand struggled for 6 years before regaining strength in 1998 with the coming of Steve Jobs. They expanded their market globally, which was a wise step to take considering that Microsoft had battered them out of US considerably. Apple focused on one thing Innovation which meant superior technology at affordable rates. While HCL ventured in HCL infosystems and HCL technologies Apple expanded its product line tapping all possible sources of  income. The iPod, iTunes, MacBook were some of the products that made apple what it is. Looking at the untapped cell phone market and putting its innovation to good use Apple came out with the iPhone which tremored the world market .HCL remained primarily in technology support but the major drawback was that not only did it compete with US giants like IBM , Apple etc.. but also with Indian firms like Wipro , Infosys and TCS which captured a major Indian market and had stable foreign presence as well . The key to apple success was that it never hauled, even in the 90’s when they faced a slumped they diversified to animation and education industry by acquiring Next and Pixar, to keep the liquidity flowing. No matter where they went they followed the policy of innovation.

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BIBLIOGRAPHY

1. 2. 3. 4.

Marketing Management by Philip Kotler  www.apple.com Wikipedia www.hcl.com

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