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

Apple and HCL

Submitted to:

Prof. Rakesh
Gupta
-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)

Section-B PGDM: 09-11

Submitted
By:
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Acknowledgement

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.

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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 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.
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Revenue chart for Apple 2008 vs. 2009

2009
4.02
6.59

37.72 Mac
18.49
iPod
iTunes
11.05 iPhone
Peripherals
22.14
Software

2008
5.11
5.68 6.8

43.95 Mac
10.28
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 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
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Headquarters and Branches

MANAGEMENT HIERARCHY
LEADERSHIP

Shiv Nadar Ajai Chowdhry J V Ramamurthy

Founder HCL, Chairman and CEO Co-Founder HCL, Chairman and CEO Chief Operating Officer
HCL Technologies HCL Infosystems HCL Infosystems 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 CHAIN ANALYSIS OF APPLE

Firm Infrastructure

HRM

Technology Development

Procurement

Inbound Outbound Marketing Services

Opreations
Logistic Logistic /Sales

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 systemsms 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.
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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.
 Low
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threats of
new
entrants

High
Moder bargaining current bargaining
-ate
power of competition: power of
suppliers very intense customers

threat of
sustitute
products

high

Porters five forces of PC market in india

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
rces resulting a tough competition is made the Indian economic
very turbulent.

Threat of substitutes:
Technology changes very rapidly in this type of industry
industry. The product life cycle is
very small therefore no one can guess when the current technology
techno 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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SWOT 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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SWOT 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 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. 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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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. Marketing Management by Philip Kotler

2. www.apple.com
3. Wikipedia
4. www.hcl.com