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Introduction

Apple Computer’s 30-year history is full of highs and lows, which is what wewould expect in a highly innovative company. They evolved throughout the yearsinto an organization that is very much a representation of its leader, Steven Jobs.Apple made several hugely successful product introductions over the years. Theyhave also completely fallen on their face on several occasions. They struggledmightily while Jobs was not a part of the organization. Apple reached a pointwhere many thought they would not survive. When asked in late 1997 what Jobsshould do as head of Apple, Dell Inc.'s (DELL) then-CEO Michael S. Dell said atan investor conference: "I'd shut it down and give the money back to theshareholders.” (Burrows, Grover, and Green).Well, times changed. Less than 10 years later, Business Week ranked Apple as thetop performer in its 2008 Business Week 50. Apple attributes their recent successto robust sales of iPod music players (62 million in 2008). They are optimisticabout the economies of scope with media giants, such as Disney and Pixar.Apple rarely introduces a new type of product. Thus, instead of being the pioneer,they are an expert “second mover” by refining existing products. Portable music players and notebook computers are examples. Apple increases the appeal of these products by making them stylish and more functional. They now appear poised tomake significant strides in the home computer market and to creating a total digitallifestyle whereby the home is a multimedia hub.

Review of Literature

Steve Jobs and Steve Wozniak founded Apple on April 1, 1976. The two Steves,Jobs and Woz (as he is commonly referred to – see woz.org), have personalitiesthat persist throughout Apple’s products, even today. Jobs was the consummatesalesperson and visionary while Woz was the inquisitive technical genius. Wozdeveloped his own homemade computer and Jobs saw its commercial potential.After selling 50 Apple I computer kits to Paul Terrell’s Byte Shop in MountainView, CA, Jobs and Woz sought financing to sell their improved version, the AppleII.They found their financier in Mike Markkula, who in turn hired Michael Scott to be CEO. The company introduced the Apple II on April 17, 1977, at the same timeCommodore released their PET computer. Once the Apple II came with Visicalc,the progenitor of the modern spreadsheet program, sales increased dramatically. In1979, Apple initiated three projects in order to stay ahead of the competition: 1) theApple III – their business oriented machine, 2) the Lisa – the planned successor tothe Apple III, and 3) Macintosh.In 1980, the company released the Apple III to the public and was a commercialflop. It was too expensive and had several design flaws that made for less-than-stellar quality. One design flaw was a lack of cooling fans, which allowed chips tooverheat. In late 1980, Apple went public, making the two Steves and Markkulawealthy – to the tune of nine figures. By 1981, the Apple III was not selling welland Scott infamously fired 40 people on Feb 25 (“Black Wednesday”).

Scott’sdirect management style conflicted with the culture Jobs and Markkula preferred,and Scott resigned in July. Markkula stepped into his position as CEO. In August1981, IBM released their PC. Unimpressed and unafraid, Apple welcomed IBM to

the PC market with a slightly smug full-page ad in the Wall Street Journal. It wouldnot be long before IBM’s PC dominated the market.The Xerox Alto was the inspiration for Apple’s Lisa. Apple employees were ableto examine the Alto in exchange for allowing Xerox to invest in Apple beforeApple’s initial public offering (IPO). Apple released the Lisa in January 1983 andwas notable for being the first computer sold to the public that utilized a GraphicUser Interface (GUI). Unfortunately, the Lisa was not compatible with existingcomputers, and therefore came bundled “with everything and a list price to match.”At $9,995 (over $21,000 in 2005 dollars), the Lisa missed its target market by awide margin.Jobs attempted to control the Lisa project. Scott, unimpressed with the performance of Jobs on the Apple III project, had Jobs head up the dog-and-ponyshow for the pending IPO. Jobs, looking for a project to lead, inserted himself intothe Macintosh development team. Using his considerable influence, Jobs was ableto procure the resources to produce a computer that was faster than Lisa, used aGUI, had a mouse, and sold for ¼

of Lisa’s price. Apple introduced theMacintosh with great fanfare during the 1984 Super Bowl. The Orwellian-themedcommercial (directed by Ridley Scott, of ‘Alien’ fame) portrayed IBM as BigBrother and embodied Macintosh and Apple as freedom-seeking individuals breaking away from this oppressive regime.The commercial was largely successfuland sales for the Mac started strong. However, Mac sales later faded. John Sculleyleft PepsiCo to join Apple in April 1983. He was famous for engineering the“Pepsi Challenge”, in which blinded testers tasted both Coke and Pepsi to unveilthe ‘truth’ of the taste of Pepsi. In response to lagging Mac sales, Sculleycontrived the ‘Test Drive a Macintosh’ campaign. In this promotion, prospectiveusers could take home a Macintosh with only a refundable deposit on their creditcard. While lauded by the public and the advertising industry, this campaign was a

Category:	Research > Internet & Technology
Rating:	(1 Rating)
Upload Date:	04/21/2009
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Tags:	apple incs swot and value chain apple incs swot and value chain (fewer)

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