Executive Summary of Apple Technology company in American

Apple Corporation is among the largest organizations in the world. It is an American corporation whose headquarter quarter is situated in California USA. Apple Corporation provides computer software, online services, consumer electronics, and other devices to its customers. The iPhone is one of the most selling products of the corporation. Meeting the challenge of managing uncertainty is a tough task. The uncertainty can have a huge impact on the profitability, performance, and overall efficiency of the organization. Managing uncertainty is important because if the organization is not going to manage uncertainty than there is a chance that the corporation might experience a financial loss. There are various ways through which the corporation can manage its uncertainty. Through analysis of the profitability ratios, it can be seen how the corporation is utilizing its assets for generating earnings. Through profitability ratios, a quick overview of the organization’s financial performance can be obtained. The profitability ratios are indicating that the organization is utilizing its assets effectively for generating profit. The net profit margin in the year 2019 was 21.24 which shows that the corporation is generating a good amount of profit. Through profitability ratios, it is clear that the organization has to manage uncertainty efficiently.

Table of Contents

Executive Summary. 1

Introduction. 2

Uncertainties Faced by Apple corporation. 3

Environment Level 3

Economic Uncertainties. 3

Regulatory and political uncertainties. 4

Industry Level 4

Market uncertainty. 4

Competition Risk. 4

How Apple Manages Uncertainties. 5

Successful leadership. 5

Technology. 5

Innovation. 5

Critical analysis of Apple’s uncertainty management 6

Profitability. 6

Liquidity. 7

Efficiency. 8

Financial Leverage. 9

Conclusion. 10

References

Introduction of Apple Technology company in American

Apple Corporation is among the largest organizations in the world. It is an American corporation whose headquarter quarter is situated in California USA. Apple Corporation provides computer software, online services, consumer electronics, and other devices to its customers. The iPhone is one of the most selling products of the corporation. Apple Inc. is among the largest technology companies in the world. Apple organization has its presence in different countries around the world. The products of the corporation are unique and innovative and that’s why the organization charge premium price from its customers. Over the years the organization has experienced significant growth. Apple Company has many loyal customers.

Meeting the challenge of managing uncertainty is a tough task. The uncertainty can have a huge impact on the profitability, performance, and overall efficiency of the organization. Managing uncertainty is important because if the organization is not going to manage uncertainty than there is a chance that the corporation might experience a financial loss. There are various ways through which the corporation can manage its uncertainty. Usually, the organizations manage uncertainty through strong leadership, technology, innovation, and through various uncertainty management strategies. Apple Corporation faces uncertainty as well and the management of the organization takes various initiatives to manage the uncertainty effectively.

Uncertainties Faced by Apple corporation

There are many types of uncertainties that the apple corporation faces on a routine basis. However, some of the major uncertainties which are faced by the organization are mentioned in this paper (Valentin, 2014). The uncertainties which the organization faces are categorized into two categories which include environmental level uncertainties and industry level uncertainties. Both types of uncertainties are discussed in detail below:

Environment Level of Apple Technology company in American

The environmental level uncertainties are mentioned below:

Economic Uncertainties of Apple Technology company in American

The uncertainty in the global economic environment can cause huge problems for the organization. If the economic condition around the world is not stable than the demand for the products and services of the organization can decrease which will ultimately decrease the revenue and profit of the corporation. The other economic uncertainties such as an increase in the tax rate, inflation rate, and the unemployment rate can affect the sales of the company. The changes in economic factors cannot only lead to a decrease in revenue but also the cost of the corporation can increase up to a lot of extents. It is important for the organization to create such strategies through which economic uncertainties can be managed efficiently (Spender, 2014).

Regulatory and political uncertainties of Apple Technology company in American

The political uncertainties are also a major challenge for the organization. As Apple Corporation has a presence in different countries around the world the political uncertainties can have a significant impact on the corporation’s performance. The governments of different countries create various rules and regulations for managing corporations. Some rules are infamous of the industries while some rules can have an impact on the sales of the corporation. The political instability in different countries can also be an issue for the sales of the products/ services of the company. The political uncertainties can be mitigated through proper strategies (Anon., 2018).

Industry Level of Apple Technology company in American

The industry level uncertainties are mentioned below:

Market uncertainty of Apple Technology company in American

The market uncertainty can become an issue for the company. The company has to analyze the market trends before launching its products. If the corporation is not going to analyze the market trend than financial loss can occur (Nijaki & Worrel, 2012).

Competition Risk of Apple Technology company in American

The competition in the market is quite higher for the apple corporation. There are many companies in the world that are creating computer hardware and software along with consumer electronics. Therefore gaining a competitive edge over the competitors is highly necessary for Apple Corporation (GOVINDARAJAN, 2007).

How Apple Manages Uncertainties
Successful leadership of Apple Technology company in American

Successful leadership is highly important for managing uncertainty. The top management is the one who is responsible for taking various decisions. The leadership of Apple Corporation takes such decisions that help the company to counter the uncertainties that exist in the market (Wang, et al., 2010). The leadership of Apple Corporation guides its employees to perform research and development so that it can know what the customers are looking for and how their needs can be fulfilled. Under the successful leadership apple corporation has achieved success over the last few decades and it can be said that leadership has made Apple Corporation one of the largest technology corporations (Kourdi, 2015).

Technology of Apple Technology company in American

The technology has no doubt one of the biggest reason which made Apple Corporation among the largest technology company. The organization pays to focus on research and development and bring such features in its products which other organizations do not provide. Not only the design of the products are unique but also it contains such features which customer does not found anywhere else. So whatever the market condition is if the customers want these features than they would definitely have to purchase the products of apple. In short, technology has helped the company to overcome the barrier of uncertainty (Campbel, et al., 2011).

Innovation of Apple Technology company in American

As discussed earlier the technology and innovation have played an important role in the success of the corporation. Through innovation, apple has provided unique products to the customers which created customer loyalty. The organization has generated a significant amount of customer loyalty and their loyal customer only prefer Apple products no matter what the circumstances are. Apple's strong brand image also plays an important rule in increasing the sales of the company. Through innovative products, the corporation has differentiated itself from the rest of the competitors and mitigated the risk of competition up to a lot of extents (Simons, 2011).

Critical analysis of Apple’s uncertainty management
Profitability

Source: (Morningstar, 2020)

Through analysis of the profitability ratios, it can be seen how the corporation is utilizing its assets for generating earnings. Through profitability ratios, a quick overview of the organization’s financial performance can be obtained. The profitability ratios are indicating that the organization is utilizing its assets effectively for generating profit. The net profit margin in the year 2019 was 21.24 which shows that the corporation is generating a good amount of profit. Through profitability ratios, it is clear that the organization has to manage uncertainty efficiently. The organization sales have grown over the years which is a sign that the corporation is taking ration decisions regarding the management of uncertainty (Fridson & Alvarez, 2011).

The ROE ratio in the year 2010 was 36.44 which grew significantly over the years and reached 55.92 in the year 2019. The ROA ratio however has shown a downward trend over the years. Overall it can be said that the corporation has managed uncertainties quite efficiently and it is reflecting from the financial performance of the organization.

Liquidity of Apple Technology company in American

Source: (Morningstar, 2020)

The liquidity ratios of the corporation indicate whether the corporation has enough cash for the payment of its short term obligations or not. The liquidity ratios include the current ratio and quick ratio. If the liquidity ratios of Apple Corporation are analyzed then it can be said that the corporation has maintained enough cash from which it can pay its short term obligations. The current ratio in the year 2012 was 1.50 which grow over the years and become 1.54 in the year 2019. The quick ratio was 0.14 in the year 2013 which become 1.01 in the year 2019.

Through liquidity ratios, it can be said that the organization has managed uncertainties efficiently and as a result, the corporation has generated a significant amount of cash. If the organization failed to manage uncertainty than the corporations financials might show a different picture. The strong financial position of the corporation is a sign that the uncertainty managing strategies of the corporation are quite effective and helping the corporation to sustain for a longer period of time. Managing uncertainty is important for a strong financial position and competing with competitors who are present in the market (Fridson & Alvarez, 2011).

Efficiency of Apple Technology company in American

Source: (Morningstar, 2020)

The efficiency ratios of the organization provide information about how the organization is managing its assets. The efficiency ratios are also known as asset management ratios. Through these ratios, it can be known how efficiently the organization is utilizing its assets for generating sales. Through efficiency ratios of Apple Corporation, it is clear that the organization is utilizing its assets efficiently for generating sales. the sales of the years have experienced a significant amount of growth that indicates that the organization is not only using its assets effectively but also managed certainty up to a lot of extents (Pandey, 2015).

The asset turnover ratio of the organization was 1.01 in the year2010 which become 0.74 in the year 2019. The fixed asset turnover ratio was 16.89 in the year 2010 which reached up to 6.61 in the year 2019. Through these ratios, it is clear that the organization’s efficiency has declined over the years. The declining efficiency of the corporation should be a matter of concern for the manager. The organization should take steps to increase the efficiency of the corporation. When the organization is going to utilize its asset more efficiently than the revenue of the company will also increase as a result (Fridson & Alvarez, 2011).

Financial Leverage of Apple Technology company in American

Source: (Morningstar, 2020)

The financial leverage ratios show how much resources the organization has to pay its long term obligations. The organization finances its activities with debt and equity financing. Together they make up the capital structure of the organization. The capital structure of the organization is to consider optimum or best when the cost of capital is lower. The optimum capital structure occurs when there is 60% equity and 40% debt. Apple Corporation has financed its assets from both equity and debt financing. If the financial leverage ratios of the organization are analyzed then it can be said that the organization's debt condition is stable (Chandra, 2011).

The corporation has enough cash or resources from which it can pay its long term debt. However, the rising debt condition of the organization should be a matter of concern for the management. Too much debt will create risk for the organization. Paying back too much debt can become difficult for the organization in the near future. That is why it is recommended for the corporation to finance its assets from equity in the near future. If the over the financial condition of the company is analyzed then it can be said that the company’s financial position is strong which clearly indicates that the company is managing uncertainties quite effectively.

Conclusion of Apple Technology company in American

It is concluded that the uncertainty in the global economic environment can cause huge problems for the organization. If the economic condition around the world is not stable than the demand for the products and services of the organization can decrease which will ultimately decrease the revenue and profit of the corporation. The other economic uncertainties such as an increase in the tax rate, inflation rate, and unemployment rate can affect the sales of the company. The changes in economic factors cannot only lead to a decrease in revenue but also the cost of the corporation can increase up to a lot of extents. It is important for the organization to create such strategies through which economic uncertainties can be managed efficiently. Successful leadership is highly important for managing uncertainty. The top management is the one who is responsible for taking various decisions. The leadership of Apple Corporation takes such decisions that help the company to counter the uncertainties that exist in the market. The leadership of Apple Corporation guides its employees to perform research and development so that it can know what the customers are looking for and how their needs can be fulfilled. Under the successful leadership apple corporation has achieved success over the last few decades and it can be said that leadership has made Apple Corporation one of the largest technology corporations.

References of Apple Technology company in American

Anon., 2018. International Organizations. [Online]
Available at: http://internationalrelations.org/international-organizations/

Campbel, D., Edgar, D. & Stonehouse, G., 2011. Business Strategy: An Introduction. s.l. Macmillan International Higher Education.

Chandra, P., 2011. Financial Management. s.l. Tata McGraw-Hill Education.

Fridson, M. S. & Alvarez, F., 2011. Financial Statement Analysis: A Practitioner's Guide. s.l.: John Wiley & Sons.

GOVINDARAJAN, M., 2007. MARKETING MANAGEMENT. s.l.: PHI Learning Pvt. Ltd.

Kourdi, J., 2015. The Economist: Business Strategy 3rd edition: A guide to effective decision-making. s.l.: Profile Books.

Morningstar, 2020. Apple Inc. [Online]
Available at: https://www.morningstar.com/stocks/xnas/aapl/financials

Nijaki, L. K. & Worrel, G., 2012. Procurement for sustainable local economic development. Volume 25, pp. 133-153.

Pandey, I., 2015. Financial Management. s.l. Vikas Publishing House.

Simons, R., ed., 2011. Human Resource Management: Issues, Challenges, and Opportunities. s.l. CRC Press.

Spender, J.-C., 2014. Business Strategy: Managing Uncertainty, Opportunity, and Enterprise. s.l. OUP Oxford.

Valentin, E., 2014. Business Planning and Market Strategy. s.l. SAGE Publications.

Wang, F.-J., Chich-Jen, S. & Mei-Ling, T., 2010. Effect of leadership style on organizational performance as viewed from the human resource management strategy. African Journal of Business Management, 4(18), pp. 3924-3936.