Beginner's Guide to Picking Stocks: Step 4 of 10.

As always, you can read this on my blog, or read it on Reddit.

Step 4 of 10: What is company’s business and/or growth strategy?

Once we figure out the company’s competitive advantage is, we can kind of get the feel for what the company should focus on and how the company should operate because we would want the company’s strategy to either focus on protecting their moat or trying to go after other weak moats to grow their own moat. We should also watch out if the company to spreading out too thin since one company cannot do everything.

Let’s quickly summarize what Apple’s competitive advantages were.

Premium brand

Network effect

Ease of Use

Customer Service

Apple’s 2016 annual report under business strategy, their first sentence is:

“The Company is committed to bringing the best user experience to its customers through its innovative hardware, software, and services”

This state is perfectly in-line with the competitive advantage that we wrote down in Step 3 of 10. We said that ease of use is one of their competitive advantages.

Here is another statement made by Apple:

“The Company believes a high-quality buying experience with knowledgeable salespersons … the Company’s strategy also includes building and expanding its own retail and online stores and its third-party distribution network to effectively reach more customers and provide them with a high-quality sales and post-sales support experience.”

This statement is in-line with customer service being one of their competitive advantages.

Expanding the network:

“The Company also supports a community for the development of third-party software and hardware products and digital content that complement the Company’s offerings.”

The more users, the more developers, which will create more apps, which will more value for the end user. This will increase Apple’s network advantage.

TL; DR

• Check back what the competitive advantages are.
• Check the company’s business strategy.
• Do their strategies revolve around protecting their competitive advantages?

Up Next Week: Step 5 of 10 – What is the Company’s Revenue, Cash & Debt?

Submitted December 01, 2017 at 04:57PM by stock_market_noob http://ift.tt/2zXlgRN