SM Final Project

1

Prof. Rakesh Gupta

Submitted to:Submitted to:Submitted to:Submitted to:

Submitted

By:

-Abhishek Shahi (FT-09-706) -Anu Gupta (FT-09-727)

-Krutika Doshi(FT-09-765) -Saumya Chaturvedi(FT-09-884)

-Shivam Behl (FT-09-852) -Vipan Kumar (FT-09-877)

PGDM: 09-11

Section-B

Apple and HCL

A P RO J E C T R E P O RT O N

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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 successful

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 of

immense help to us.

Acknowledgement

3

Table of content Page Number

1. Executive Summary 4

2. Introduction of Apple 5

3. Vision & mission of Apple 9

4. Introduction of HCL 10

5. Vision & mission of HCL 13

6. Value chain Analysis 14

7. Porter’s Five Force Analysis 17

8. SWOT Analysis of Apple 19

9. SWOT Analysis of HCL 22

10. PEST Analysis of Apple 23

11. PEST Analysis of HCL 24

12. Bibliography 26

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EXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARY

This study was taken up for analyzing Apple Inc., which was started by Steve Jobs

and Steve Wozniac on April 1st

1976. Since then the company has gone on to

become a $32.48 billion enterprise and is ranked 71st

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 1st

April 1976 just

about an year later on January 3rd

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.

RRRReeeevenue chart for Apple 2008 vs. 2009venue chart for Apple 2008 vs. 2009venue chart for Apple 2008 vs. 2009venue chart for Apple 2008 vs. 2009

11.05

18.49

4.02

28.18

10.28

5.68

5.11

venue chart for Apple 2008 vs. 2009venue chart for Apple 2008 vs. 2009venue chart for Apple 2008 vs. 2009venue chart for Apple 2008 vs. 2009

37.72

22.14

6.59

2009

43.95

6.8

2008

8

venue chart for Apple 2008 vs. 2009venue chart for Apple 2008 vs. 2009venue chart for Apple 2008 vs. 2009venue chart for Apple 2008 vs. 2009

Mac

iPod

iTunes

iPhone

Peripherals

Software

Mac

iPod

iTunes

iPhone

Peripheral

Software

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VISION & MISSION OF APPLEVISION & MISSION OF APPLEVISION & MISSION OF APPLEVISION & 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 INFOSYSTEMHCL INFOSYSTEMHCL INFOSYSTEMHCL 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 micro-

computer. 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

Headquarters and Branches

MANAGEMENT HIERARCHY

Shiv Nadar Founder HCL, Chairman and CEO HCL Technologies

Headquarters and Branches

MANAGEMENT HIERARCHY

LEADERSHIP

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

J V RamamurthyChief Operating OfficerHCL Infosystems Ltd

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J V Ramamurthy Chief Operating Officer HCL Infosystems Ltd

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VISION & MISSION OF HCLVISION & MISSION OF HCLVISION & MISSION OF HCLVISION & 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.

VALUE CHAIN VALUE CHAIN VALUE CHAIN VALUE CHAIN

Apple has been able to perfect the chain of activities in innovation. Apple starts

from its new ideas of product design, designs it through its own resources and

funding, then manufacturing it and finally markets it wholeheartedly.

Technology and product design

It is the most important of value chain of apple. It spends 6% of its total revenue

in Research and development. It was first to provide platform for electronic

spreadsheet. Apple has a glorious in technology and development. Apple’s

operating systems have been recognized as most trusted O/S. Through his

innovative technology apple has been able to develop iPod, iTunes and iLife suite

of products.

Inbound Logistic

Opreations

Firm Infrastructure

Technology Development

Procurement

VALUE CHAIN VALUE CHAIN VALUE CHAIN VALUE CHAIN ANALYSIS OF APPLEANALYSIS OF APPLEANALYSIS OF APPLEANALYSIS OF APPLE




design




ms have been recognized as most trusted O/S. Through his


OpreationsOutbound

LogisticMarketing

/Sales

Firm Infrastructure

HRM

Technology Development

Procurement

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ANALYSIS OF APPLEANALYSIS OF APPLEANALYSIS OF APPLEANALYSIS OF APPLE







ms have been recognized as most trusted O/S. Through his


Services

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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 64-

bit 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.

Porters five forces

Threat of new entrants:

A PC maker does not require very high investment because the parts of desktops

are procured from other manufactures most of the unorganized assemblers does

this thing the entry barrier for this industry is have entered in India they have

huge pool of resources resulting a tough competition is made the

very turbulent.

Threat of substitutes:

Technology changes very rapidly in this type of industry

very small therefore no one can guess when the current techno

outdated.

bargaining power of suppliers

Moder-ate

Porters five forces of PC market in india




rces resulting a tough competition is made the Indian economic

Technology changes very rapidly in this type of industry. The product life cycle

very small therefore no one can guess when the current techno

current competition: very intense

threats of new

entrants

bargaining power of

customers

threat of sustitute products

Low

high

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Indian economic

product life cycle is

very small therefore no one can guess when the current technology will be

High

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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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SSSSWOT ANALYSIS OF APPLEWOT ANALYSIS OF APPLEWOT ANALYSIS OF APPLEWOT 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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SSSSWOT ANALYSIS OF HCLWOT ANALYSIS OF HCLWOT ANALYSIS OF HCLWOT ANALYSIS OF HCL

• STRENGTH

� 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.

• 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

� 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 APPLEPEST ANALYSIS OF APPLEPEST ANALYSIS OF APPLEPEST ANALYSIS OF APPLE

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PEST ANALYSIS OF HCLPEST ANALYSIS OF HCLPEST ANALYSIS OF HCLPEST 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. Only 1.3% of people in India own a computer.

2. Age Distribution 45% of the population is under 25.

3. Regional imbalance and low incomes.

4. 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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CONCLUSIONCONCLUSIONCONCLUSIONCONCLUSION

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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BIBLIOGRAPHYBIBLIOGRAPHYBIBLIOGRAPHYBIBLIOGRAPHY

1. Marketing Management by Philip Kotler

2. www.apple.com

3. Wikipedia

4. www.hcl.com

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SM Final Project