topic building a digital transformation solution

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VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITYUNIVERSITY OF ECONOMICS AND LAW

ASSIGNMENT ON

DIGITAL TRANSFORMATION ANDARTIFICIAL INTELLIGENCE

FOR APPLE Inc.

Lecturer/ Instructor: MA (ThS) Vu Van Diep

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Initially, we would like to thank the lecturer who guided us, MA (ThS) Vu VanDiep. Although the learning process as well as the preparation time for the essaywas not too long, we received the care, help, guidance and enthusiasm of theteacher. You have provided us a lot of useful knowledge within the subject areaand outside of life. Knowledge is infinite; thus, in the process of completing theessay, there will certainly still be shortcoming. We look forward to receivingyour comments and guidance to make our essay topic more complete.

Finally, we wish you health, happiness and success in your teaching career!

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TABLE OF CONTENTS

PART 1: INTRODUCTION...4

2.Aims of the study...4

3.Materials and Methods...4

PART 2: DISCUSSION...5

1.Overview of the enterprise...5

1.1 The history of formation...5

1.2Vision and mission...7

1.3Business model/Revenue model...7

1.4Business operation overview...10

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PART 1: INTRODUCTION1. Rationale

In an accelerating pace of globalization these days, technology plays a crucial role inhuman life. It is clearly acknowledged that more enterprises are adopting the digital

transformation model, particularly Apple Inc. However, alongside it, problems have

also emerged, which hugely affect the operation of companies.

2. Aims of the study

Digital transformation becomes more popular in the world due to huge benefits itbrings to the companies. Nevertheless, the enterprises need to understand itsdisadvantages and have suitable methods to tackle. Especially, Apple Inc. is one of thepioneers in technological change. Hence, this research topic gives an overview of thefactors affecting digital transformation in Apple Inc. and recommends some solutions.

3.Materials and Methods

In order to conduct the research, group 6 studied the existing literature on Apple Inc. to

ensure that it provided sufficient information for our research paper.

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PART 2: DISCUSSION1. Overview of the enterprise

1.1 The history of formation

Apple Inc. is a multinational technology corporation that designs, manufactures,

upgrades and sells electronic equipment, computer software and related onlineservices. Today, it is known as one of the five major corporations of the informationtechnology industry in the United States. How was the Apple company borned anddeveloped?

On April 1, 1967, Apple Computer Company was founded in Los Altos, California bySteve Jobs, Steve Wozniak and Ronald Wayne.

In July 1976, the company released its first product called "Apple I". It was the firstcomputer designed and built entirely by hand. It went on sale shortly after launch for$666.66

On January 3, 1977, Steve Jobs and Ronald Wayne contributed capital to found AppleComputer Inc. The company has achieved huge revenue (ranging around 775,000 USD- 118 million USD) within the first 5 years of operation.

On April 16, 1977, the company continued to upgrade the product to "Apple II" andchose to be the desktop platform for VisiCalc to serve office workers.

In 1984, Apple released the Macintosh (the first personal computer without aprogramming language). At first, sales were pretty good, but started to decline afterthree months due to high prices, slow speeds, and limited range of available software.In 1994, the AIM alliance was born (members include Apple, IBM and Motorola) withthe aim of creating a new computing platform (PowerPC Reference Platform, PReP)and combining IBM, Motorola hardware with Apple software.

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In 1996, the new CEO of Apple (Amelio) proceeded to lay off employees and cutproduction costs.

In 1997, Apple bought NeXT for the NeXTSTEP operating system and brought SteveJobs back to the company as a mentor to avoid bankruptcy.

On July 9, 1997, Amelio was ousted by the board of directors after overseeing year record low stock prices and severe financial losses. At that time, Jobs took therole of interim CEO and began restructuring the company's product line.

three-On November 10, 1997, Apple introduced the Apple Store website to implement a neworder strategy.

In 1998, Apple completed multiple acquisitions to create a portfolio of digitalproduction software for both professionals and consumers.

On May 19, 2001, Apple opened its first official retail stores of the same name inVirginia and California. Although new, the stores have been wildly successful withmore than 100 million units sold within six years.

On August 7, 2006, Apple made the switch to Intel chips for the entire Mac productline. Although Apple's computer market share has increased, it is still far behind itscompetitor, Microsoft Windows, but still accounts for about 8% of desktops andlaptops in the US.

On January 9, 2007, the company shifted its focus from computers to consumerelectronics. Apple would achieve widespread success with its iPhone, iPod Touch, andiPad products, introducing innovations in mobile phones, portable music players, andpersonal computers, respectively.

On August 24, 2011, Jobs resigned as CEO of Apple. Then the company brought inTim Cook to replace the position. In early October, Steve Jobs passed away andmarked the end of an era for Apple.

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In 2014, Apple reported sales of more than 51 million iPhones and 26 million iPads.This profit made the group an all-time quarterly sales record. In addition, Apple hasalso topped Interbrand's annual best global brand for the sixth year in a row. Total assetvaluation is up to $214.48 billion.1

To this day, the brand is still highly appreciated by many consumers for the quality ofproducts and services. The development of Apple Corporation will bring the worldtechnology industry to a new height. Apple is the world's largest technology companyby revenue and one of the world's most valuable companies. Ultimately, the companyoutperforms many corporations because it has a high level of brand loyalty and ranksas the most valuable brand in the world.

1.2Vision and mission

Vision: Apple wants everyone in the world to benefit directly from technology.

Mission: Apple is always different. A different kind of company with a different visionof the world. It's a special place where we have the opportunity to create the bestproducts on the planet, change lives and help shape the future.

1.3Business model/Revenue model

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in April 1976, Apple is one of the leading multinational technologycompanies and is considered one of the top 4 major companies in the world. Apple'sbusiness model is based on the design, development, production, and sale of computersoftware, mobile devices, and online services.

Apple's business model helps the entire company generate cash through differentproduct categories. The company sells 3 types of products, namely:

Hardware products: iPhone smartphones, iPad tablets, Mac personal computers, iPod

portable multimedia players, Apple Watch smart watches, AirPods wirelessheadphones, HomePod smart speakers.

Software products: Mac operating system, iOS, iPadOS, watchOS, tvOS operating

system, iTunes media player, Safari web browser, Shazam audio fingerprint utility.

Online Services: iTunes Store, iOS App Store, Mac App Store, Apple Arcade, Apple

Music, Apple TV+, iMessage, and iCloud.

Apple's business model is admired by many large and small technology companies inthe world through numbers related to profits and revenue. Apple Corporation's totaloperating income in 2018 was $608 billion, about 50% more than the combined resultsof Facebook, Alphabet, and Amazon. Detail:

Revenue $265,595 billion.

Operating income $70.898 billionNet income $59.531 billionTotal assets $365.725 billionTotal equity $107.147 billion

To achieve the current success, the company has used all its resources to make moneythrough 3 main methods. That is:

Selling products: Apple makes money by selling some of the top products globally

such as Iphone, Mac, iPod, Apple Watch, Apple TV phones.

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Collect monthly/yearly subscription fees through online services: When users

subscribe to different apps and software, they pay a fee to Apple. When content ownersand developers sell their digital content and apps through various Apple resources,they pay the company a fee. Apple application software such as iLife, iWork, iCloud,Apple Care, Apple Music…

Extended warranties for company products: Apple also makes money when users

pay extended warranty fees for their respective products. Using retail and online storesand a direct sales force, Apple sells its products and services in major global markets.In addition, Apple is also involved in the sale of a variety of third-party products thatare compatible with Apple, such as various applications and accessories. In addition,Apple provides indirect distribution channels such as third-party cellular networkproviders, value-added resellers, and retailers.

To maximize annual profits, Apple's leader built a core belief system in a businessmodel that includes three items:

Put the product above anything else: The company always prioritizes providing the

best products to customers instead of focusing on the profits that the company canmake. Retail stores around the world are trained to prioritize customer experience first,especially potential customers. They can even give their customers anything they want.

Stay focused on optimizing the company's global presence: The value of the Apple

Company starts from the focus they have. They expand the company's network usingcompany-owned retail stores around the world. So there is no doubt about the fact thatthey have focused quite a bit on their goals. The amount of money the company isspending on Apple products is undoubtedly one of the main reasons why it is sopopular among the people. The company is also focused on building differentplatforms that can be used for apps and content delivery across Apple devices.

Incorporate a vertically integrated business model for a better user experience:

Apple's business model combines a vertically integrated business model that helps thecompany deliver the best user experience to its users. Apple engages in the design and

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manufacture of its own operating systems, application software, hardware, andservices. Therefore, the company integrates all these, so users can easily use theproducts seamlessly. All technical innovations and breakthroughs are handled onlythrough Apple and not any other partner. Because of this vertically integrated model,Apple creates top-of-the-line products that are considered the best in the industry, andas a result, they sell at a higher price point.

1.4Business operation overview

The level of popularity of Apple can be something that no one can deny, this is a brandknown by family members on a global scale. Over the years of construction anddevelopment with many ups and downs Apple has built itself a leading position. Theresults that Apple has achieved can be the dream of many brands everywhere.

Up to now, Apple's product lines have been extremely diverse with many differenttypes and versions. Apple has provided the application for the consumer market using220 product lines and that does not include versions of the same type. If we let us listeach product type, it would be a long list. Currently, Tim Cook is the CEO at theposition of this destructive corporation, the exact formula confirmed this position inAugust 2021. But in a short period of time, it has created a lot of new changes, madeoutstanding marks and surprised many people in the industry.

2. Analysis of enterprise

2.1 SWOT

2.1.1 Strengths

Innovative products, unique design

The ability to self-design from hardware to software in products has helped Applebecome a leading technology device manufacturing company.

Every year, their new products are improved upon their predecessors, improvising thedesign, usability to make it as easy as possible with the product. Apple has consistently

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ranked at the top of BDG's 50 companies list since 2005 thanks to their innovation inelectronic devices.

That is also one of the reasons why their brand still dominates the market despite beingappreciated more than competitors.

Introducing new services

Thanks to the advent of several new technologies in digital payments and streaming,Apple has succeeded in launching their own system. Apple TV+, Apple Music, iTunes,Apple Card and Apple Arcade are among the new services launched and continuouslyimproved by Apple.

Apple's services portfolio (services portfolio) accounted for 17.7% of the company'sannual revenue.

Corporate culture

The ability to deliver high-quality products and consistently rank among the world'sleading technology brands is partly due to the company's culture. Applying innovativethinking, continuous creativity has helped each individual discover and explore thebest ideas, develop a strong internal culture. Two factors "creativity - excellence"become Apple's guideline, helping to promote business development and continuousgrowth.

In addition, it is noticed that Apple has a rather "odd" culture of keeping absolutesecrecy. Apple always keeps all information private to protect its unique creation.While many businesses want to get closer to customers through differentcommunication channels, from social to offline, Apple minimizes communication withthe media, customers and its shareholders.

Excellent technology

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Compromising with quality is the fastest way to destroy a brand. Apple is operating asa leading technology company, developing products that focus on quality and that is aprerequisite for maintaining customer loyalty to the brand.

Continuous innovation, top quality but still aiming for simplicity have helped Applestay ahead of its competitors with a brand loyalty level of 87%, in the US and othercountries alone. Europe country.

Brands often mistakenly believe that technological advancement and technologicalexcellence only need to use complex technical elements. But Apple goes the oppositeway. This brand always makes things as simple as possible. That is why the operatingsystem of the iPhone or iPad is considered extremely user-friendly.

2.1.2 Weaknesses

Limited distribution network

Apple Inc. have a limited distribution network as they sell their own products and havevery few stores scattered around the world. Unlike other smartphone products,customers can easily buy products at any phone store in the world, but with Apple, youcan hardly do so.

Most buyers do so directly from their website. The main downside of this is thatApple's market reach is limited.

Lack of compatibility

Apple products are only compatible with its accessories. Apple products do notsupport other software or technologies that make them incompatible on other devices.This requires customers to exclusively purchase Apple apps or accessories such ascharging cables and plugs to continue using the product.

High price

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