Question

With $132 billion in cash, what should Apple do to sustain growth? You now know that Apple can grow via concentration, integration, diversification strategies. If Apple were make acquisitions to grow, what should it buy? Write up a 150 word max proposal to the Apple’s board of directors outlining your recommendations.

Answer 1

I think the only option Apple is to continue to put more in R&D in its existing products to sustain market share and continue to earn industry leading margins and pay the extra cash in terms of dividends and share repurchases by which there will be less number of shares in the market as outstanding which would mean EPS will grow at higher levels.

The second option is to use some cash for acquistions but here is the need to be careful as the company might end with overpaying. I would suggest Apple to buy mid-range branded smartphone producer in Asia by which it can target mid range customers which can also prove EPS accretive, but dividend and share repurchases should also be there along with the acquistion as cash amount is huge.

the above is answer..