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Apple Computer Corporate and Business Strategy

Price erosion

• Continued growth of “white boxes.”

• Vertical integration by Microsoft or Intel.

• Substitutes – PDA’s, WebTV

• International Competition

• Retail exclusion

COMPAQ SWOT ANALYSIS

Strengths

• Strong brand equity.

• Market share leader.

• Extensive product line.

Weaknesses

• Longest cash conversion cycles.

• Longest inventory turnover.

• High overhead: low operating and profit margins.

• Slow to incorporate direct selling model.

• Lack of product innovation – tight R&D budget.

• Poor ROE

• Heavy debt load

• Declining market share.

Opportunities

• Less price erosion within high end server market where foothold is present.

• Direct selling website

• Acquisition or merger

• International sales

Threats

• Continued industry price erosion

• Continued growth of “white boxes” cutting market share

• Vertical integration by Microsoft or Intel.

• Substitutes – PDA’s, WebTV

• International Competition

HP SWAT ANALYSIS

Strengths

• Brand leader in printer and imaging markets – complements to PC industry.

• Ability to leverage IT services and printer markets to boost profit margins.

• Product innovation pipeline – largest R&D budget among top 4.

• Increasing market share.

Weaknesses

• Poor stock performance – shareholder skepticism on firm’s ability to generate profit.

• Lowest operating margins among PC manufacturers.

• Highly diversified, undefined core competence.

Opportunities

• Printer, Imaging, & IT services market.

• Direct selling website

• Acquisition or merger

• International sales

• Outsource production.

Threats

• Continued industry price erosion

• Continued growth of “white boxes” cutting market share

• Vertical integration by Microsoft or Intel.

• Substitutes – PDA’s, WebTV

• International Competition

IBM SWAT ANALYSIS

Strengths

• Highest operating and profit margins, extremely efficient.

• Procurement – lowest COGS.

• Largest computer company by revenue – economies of scale

• Diversified products and markets: hardware and software.

• Horizontally and vertically integrated.

• Mainframe market leader

• Corporate market dominance – bundled services

Weaknesses

• Heavy debt load.

• Inferior OS and CPU performance.

• Declining market share.

Opportunities

• Direct selling website

• Large cash reserves make acquisition possible.

• International [next page]