Apple Inc. – Risk management

Résumé du document

This report has been made for the launch of Apple Inc.'s new project, a brand new iPhone. The paper focuses on the possible risks Apple might have to face with its new product and how they could have an impact on the company. Six categories of risks will be identified and described individually: political risks, economical risks, social risks, technological risks, environmental risks and legal risks. The complete analysis of the risks and the impact they could have on the project and the whole company will lead us to propose key recommendations to Apple, which will create value for the company.

Those key recommendations are:
-Subscribe to insurances
-Create a money reserve dedicated to legal purposes
-Intellectual protection with patents
-Invest in Research and Development
-Improve the relationship with partner countries

In order to arrive to those recommendations, a Risk Strategy Assessment have been done on the new project using the following risk management tools:
-The Risk Intelligence Score
-The Risk Diversification Score
-The Risk Exposure

Extraits

[...] Risk Intelligence scores As we have seen previously, the risks that are learnable are the political risks, the economical risks, the legal risks, the technological risks and the social risks. All of these risks can be analyzed which make them less uncertain. Apple can more easily take the right measures in order to prevent or lessen their impact on the company. On the other hand, the environmental risks can't really be predicted and it is therefore almost impossible to reduce their uncertainty. [...]

[...] The Motley Fool. http://beta.fool.com/mpnolan222/2012/11/08/apple-risk-factors-and-how- they-have-begun-to-surf/15644/ - Steve Hargraves. (2013) Energy prices on the rise again. CNN Money. http://money.cnn.com/2013/01/30/news/economy/energy-prices-oil- gas/index.html - Nicholas Carlson. (2012) Where Apple's Revenue Comes From. Business Insider. http://www.businessinsider.com/chart-of-the-day-apple-revenue- product-2012-10 - Henry Blodget. (2012) This Trend is Very Worrisome For Apple. Business Insider. http://www.businessinsider.com/mobile-market-share-2012-11 - Value at Risk Definition. [...]

[...] Apple Inc. has to remain attractive by constantly innovating and keeping its popularity amongst consumers. As we can see on Businessinsider.com, Apple is the second biggest phone company in the world with 34% market share, behind Samsung who has 53%. As it's main South Korean competitor is gaining market shares, the Apple Company is starting to see a decrease in the sales of iPhones, which represents almost 50% of its revenue. Analysts predict that the company will have to face this problem by lowering its profit margin, which is very high compared to the other phone companies (as you can see on the graph below). [...]

[...] We can see on Apple's website that the company had a revenue of $36 billion at the fourth quarter of 2012. We have seen earlier that iPhones represents 50% of Apple's source of revenue. We know that if something happens to the production or sales of iPhones, it will have a big impact on the company. We can therefore estimate the risk exposure of this project to be approximately 50%. Risk strategy decision After having done the analysis of all the possible risks that could face Apple Inc. [...]

[...] Inadequate risk management can result in severe consequences for companies as well as individuals. In the case of Apple, we need to identify and then analyze the potential risks it's going to face when launching its new iPhone. As an international hardware and software company, we already know it will have to face many political, economical, technological, social, environmental and legal risks. The bigger the company, the more risks need to be taken into account. A company that is present in the whole world will have to manage the possible risks in each country and face a lot of competitors. [...]