Apple, Inc. in the Tech Industry

The company I have chosen is Apple, Inc. in the tech industry and their WACC is 7.7% as of April 19, 2022 (Templatemo, n.d.). Apple is obviously well known for all of their electronic devices that we’re all dependent on now for our daily lives. They compete with some of the largest tech manufacturers in the world to win over consumers with their computer, tablet and smartphone products. One of their largest competitors in the smartphone business is Samsung whose WACC as of April 19th is 3.67% (Samsung Electronics, n.d.). One of their largest competitors in the computer business is Dell Technologies whose WACC as of April 19th is 6.19% (Dell Technologies, n.d). As of January 2022, the industry WACC average for electronics was 5.43% (Cost of equity and Capital, n.d.). So as far as the value of Apple versus its competitors is concerned, it is far out-performing industry average on its return to its shareholders then the two competitor examples provided.
Covid-19 “exposed the degree to which our global supply chains are fragile and lethargic in their ability to respond to unexpected changes in demand” (Witham, 2021, par. 5). There have been many events in the last few decades that threatened the careful balance of global trade, including raw material shortages, extreme weather events, and trade disputes between countries and political foes but certainly nothing as widespread as Covid-19 (Witham, 2021). Given the huge risk that almost all businesses now face in the event of future pandemics (now that we know they are possible with all of their ripple effects), businesses need to take steps now to protect their WACC so that it isn’t impacted again like all industries were at the initial global shutdown. Some steps to take to avoid this risk would be to plan like it will happen and not if, to maybe adjust the standards to just-in-time inventory so that there are at least larger safety stocks of critical product components and raw materials on-hand, develop new technology that is electric dependent rather than semiconductor dependent, and improve supplier relationships (Witham, 2021). The shutdown of the entire world tumbled all stocks in all sectors and I sure hope that everyone can agree that we probably should never let that happen again! And now that the post-covid work/home/life dynamic has almost permanently changed, technology is what will keep us all connected whenever and wherever we work and live.