Andrew Herfurth 1

Education Market Strategy for Apple Inc. By Team Fusion

Andrew HerfurthCarey ReynoldsAndrew SchieweTanasha SmithTanner KelleyThao Nguyen

Andrew Herfurth 2

Roadmap

o Recap oAndrew Herfurth

o Implementation step overviewoCarey Reynolds oAndrew Schiewe

o Implications across organizationoTanasha SmithoTanner KelleyoThao Nguyen

Andrew Herfurth 3

SWOT Analysis

Strength to be exploited ◦(S1): MacOS system prevents most

malware virusesOpportunity to be exploited

◦(O1): Education marketMore effort into education market

◦(S1, O1)

Andrew Herfurth 4

Profit to be Made

1.3 trillion dollars is spent on technology in educational institutions each year

This money is mainly in the form of grants given by the United States government.

Implementation Steps

Putting the plan together

Carey Reynolds 6

Overview of Implementation Steps

1) Evaluation of entering into the educational market

2) MarketSegmentation and Target Marketing

3) Seek more Textbook Company Partnerships

4) Educational App Development/Improvement

Carey Reynolds 7

What to doPerform cost-benefit analysis to see

where entering into the education market is most effective

Be more flexible with their pricing to allow for more educational institutions to be able to purchase Apple products

Promotions and advertisements directed towards educational markets◦Personal selling

Carey Reynolds 8

Target Market◦Middle to upper class suburban areas◦Reach out to other demographics to

get more market share

Market Segmentation◦Business to business markets◦Demographic and geographic

segmentation variables primarily

Market Segmentation/ Target Market

Andrew Schiewe 9

Textbook Company Partnerships

Current Partners:◦McGraw Hill◦Pearson Education◦Houghton Mifflin Harcourt

Potential Partners◦Scholastic◦Oxford University Press◦Wiley

Cheaper TextbooksStudies show benefits of technology in

the classroom

10

Educational App Development/Improvement

Current Apps:◦iTunes U◦iBooks

App Customization/ Development services

Contribution incentives for teachers/professors

Note-taking and productivity apps

Andrew Schiewe

Andrew Schiewe 11

Implications of Implementing Apple’s Strategy

Change happens when implementing new plans

Research and Development & Quality

Management Implications

Tanasha Smith 13

Research and Development

$10 billion innovation expansion (2013)

Marketing department trainingNew employeesMobile learning Bring your own device programs

Tanasha Smith 14

Quality Management

Level of customer satisfaction that must be maintained in the new apps and environment

Improving quality in every facet of business

Maximize utility of products in education

Marketing and Human Resource Implications

Tanner Kelley 16

Forecasted Marketing ImplicationsImplication of Business to Business

Market Segmentation:◦ Form of Market Development

Targeting Educational Institutions entails expanding to new users as well as new uses of current products.

Is expanding to the educational market profitable? ◦ Apple will need to expand sales by

demonstrating new uses for its products◦ To expand sales Apple must use personal

selling Product has high value, there are few customers, and

buyers are geographically concentrated.

Tanner Kelley 17

Cost Implications of Personal Selling

◦Expanding Apple’s market to include educational institutions requires a larger sales force Leads to increased costs for salaries,

wages & commissions Apple sales force typically paid between

$15 and $30 Recently, Apple announced raising employees

wages by as much as 25%.

Tanner Kelley 18

Human Resource Implications of Increasing Sales ForceExpanding the Sales Force requires:

◦Average costs of hiring new employees is about $4,000 (University of California of Berkeley)

◦Additional employee training: Extensive training to become knowledgeable

on Apple products Increased cost in instructor-led classes for the

Apple Certification Exam

◦Recruitment: Costs of recruitment include sourcing costs

(i.e. advertising and internet postings)

Forecasting and Budget Implications

Thao Nguyen 20

Forecasting As of March, 2013, Sales will be $41 - $43 billion $10 billion on innovation, expansion in 2013, said

Chief Financial Officer Peter Oppenheimer Apple's iPads education sales double, two iPads for

every Mac ◦ McAllen, Texas, public school officials plan to

distribute 25,000 iPads over the next few years

$20 million spent for the cost of the iPads, Wi-Fi network and training needed

◦ San Diego distributes 26,000 iPads to students

◦ Chicago public schools have around 20,000 iPads.

“School iPads & tablets development, Fall 2012” Source: http://www.ipadinschools.com/

Thao Nguyen 21

Source: http://www.glassdoor.com/GD/Salary/Apple-Salaries-E1138.htm?filter.jobTitleFTS=sale

Thao Nguyen 22

Budget Quarterly

Hiring cost $4,000

Employees

$20/hour (200 employees)

$20/hour * 12hour * 80 days/quarter * 200 employees $3,840,000

R&D (6% of sale)

March sale = $42 billion 6% * $42 billion

$2,520,000,00

0

Investment in retail stores

$1 billion in 2013 $1 billion/4 $250,000,000

Total budget   

$2,773,844,00

0

Thao Nguyen 23

DuPont Analysis

Thao Nguyen 24

DuPont Analysis

As of March 29, 2013 (forecasted) 8%

As of June 29, 2013 (forecasted) 9%

This ROE is still out of rank of 15-20% desirable

Thao Nguyen 25

Source: http://seekingalpha.com/article/1160191-peeling-apple-a-long-term-roe-analysis

Andrew Herfurth 26

ConclusionImplementation steps Evaluation of entering into the educational

market Market Segmentation and Target Marketing Seek more Textbook Company Partnerships Educational App Development/ImprovementImplications across the organization Research and Development Quality management Implications in marketing, HR, and costs Forecast

Team Fusion 27

Q&A

Andrew Herfurth 28

Works Cited http://work.chron.com/average-cost-hire-new-employ

ee-13262.html http://online.wsj.com/article/SB100014240527023047

65304577478903919636114.html http://www.apple.com/jobs/us/ http://www.ramco.com/blog/the-right-way-to-erp-impl

ementation  

http://www.forbes.com/fdc/welcome_mjx.shtml http://www.ipadinschools.com/ http://

appleinsider.com/articles/13/01/24/apple-to-spend-10-billion-on-innovation-expansion-in-2013

http://www.cnn.com/2012/01/23/tech/innovation/ipad-solid-education-tool