Case 07 - Apple Inc in 2008 | Apple Inc. | Steve Jobs

Case Study 7: Apple Inc.

, in 2008

1. How well has Steve Jobs done as Apple’s CEO? Has he done a good job of performing the five tasks of strategic management discussed in Chapter 2? Why or why not? What grade would you give him? Regardless of a rocky history between co-founder Steve Jobs and Apple, Inc., Jobs was able to return to Apple in 1997 after a string of CEO's were run through and replaced and the company was losing money. Since his return, Jobs has taken Apple from reporting quarterly losses to introducing new and innovative product lines, such as the iPod music player which has become a pillar of Apple's current success and has helped increased earnings per share from $1.5 million in 2005 to $3.93 million in 2007. Job's has continued to pursue the introduction of new, stylized, and user-friendly products helping the brand to increase its market share and new industries and markets. When considering Jobs success as CEO of Apple, it is important to consider his execution of the five tasks of strategic management. Jobs was asked to leave Apple in the 1980's due poor management, he was brought back in over ideas for new development. Jobs clearly saw the market trending towards the synchronization between mobiles phones and computers as well as the market of digital music players and focused the strategic vision towards these changes. Objectives were set around financial success and measuring the performance by units sold. Jobs crafted a strategy of entering these markets by selling highly differentiated, stylized and easy-to-use products, implementing this by pushing research and development of new products and evaluating the market trends and reacting with new innovations. The company's sales have increased between 2001-2007 and Apple has consistently responded to the market changes by introducing new products and appealing to an ever-widening market and increasing its market share. When assessing Jobs role as CEO of Apple in terms of changes in both the company's financial status and strategy, it is clear Jobs has been an integral part of this accomplishment and therefore successful in terms of his job description.
2. What are the chief elements of Apple’s strategy? How well do the pieces fit together? Is the strategy evolving?

Despite certain setbacks, Apple kept brining innovative products to the market, realizing that innovation would have to be the company’s strategy against big companies like IBM and Microsoft. The New strategy for apple is to go after three strategic areas of the market and for Apple to be a competitor in the computer, digital music player, and mobile phone industries. With going for these areas it makes Apple seem more like three separate companies which allows them to diversify and grow as a company. All these pieces fitting together helps Apple increase in market share. With the way technology is constantly changing and the way that consumers are buying these products the strategy is constantly changing and growing along with the economy. 3. Does it make good strategic sense for Apple to be a competitor in the computer, digital music player, and mobile phone industries? Are the value chain activities that Apple performs in computers, digital music players, and mobile phones very similar and “compatible” or are there very important differences from product to product? Which of the three products lines —computers, digital music players, or mobile phones—do you think is most important to Apple’s future growth and profitability? Why? Yes, it makes good strategic sense for Apple to be a competitor in the computer, digital music player, and mobile phone industries. The value chain activities that Apple performs in computers, digital music players, and mobile phones very important differences from product to product which in return makes Apple a viable competitor in the market. By Apple following along with their strategic plan I believe this will help the growth of the company and their growth of profitability by bring their new products to the masses.

In 2000. Among these digital music player competitors.4. the company reported its best third quarter in history with revenues of $7. Steve Jobs was with the company from the beginning but had some key decision-making authority taken away after an unsuccessful coup. Additionally. 5. sales activities and service and support in all markets and countries). With Apple’s competitors constantly coming out with the bigger and better things and technology always changing every six months or so Computer is a more intense competition for Apple or any computer technology company. tax. responsible for managing supply chain. treasury. In 1985. In which industry—computers or digital music players—is competition more intense? Prepare a five-forces analysis of each industry to support your position. who enjoys the strongest competitive position? Who is in the weakest overall competitive position? Has Apple’s strategy resulted in a substantial competitive advantage over its rivals in the computer industry? What is the basis for whatever competitive advantage it has? Apple’s recent performance has been stellar. Apple’s success with its product lines has not always been stable. corporate development and human resources departments) and Timothy Cook (executive vice president of worldwide sales and operations. In 2008 Apple took home several silver and gold Industrial Design Excellence Awards. Steve Jobs announced that he was the permanent CEO of Apple. 6. Among these competitors. as compared to other main players in the digital music industry? Use the methodology in Table 4. The company also set a company record for Mac sales in that quarter. after an extended period with little success and after several CEO changes.7 billion and a net quarterly profit of $1 billion. Peter Oppenheimer (responsible for supervision of the controller. investor relations. which company enjoys the strongest competitive position? Who is in the weakest overall competitive position? Has Apple’s strategy resulted in a substantial competitive advantage over its rivals in the digital music player industry? What is the basis for whatever competitive advantage Apple has? 7. What accounts for Apple’s noteworthy success in the markets for mobile smart phones and digital music players. 10. Steve Jobs resigned as chairman of the company following his unsuccessful removal attempt of John Sculley (the board voted unanimously to retain him as president and CEO) and after the board stripped Jobs of all decision-making authority. as compared to the leaders in the personal computer industry? Use the methodology in Table 4. What does a competitive strength assessment reveal about Apple. What is your assessment of Apple Computer’s financial performance the past three years? (Use the financial ratios in Table 4. What does a competitive strength assessment reveal about Apple.1 of Chapter 4 as a guide in doing your financial analysis. However. Steve Jobs was rehired in 1996.4 to support your answer. but its overall weak showing in the computer industry? 9. information systems. The current leadership includes Steve Jobs (CEO). Is Apple’s strategy in its computer business strong enough to compete successfully against Dell and HP? With the high cost of Apple’s computer products and the consumers who would prefer their product over .) 8. Apple retired $300 million in debt without hurting its operating areas. internal audit.4 to support your answer. sponsored by the Industrial Designers Society of America. In 2008.

the overall comparativeness of customer satisfaction overall shows that Apple’s iPod can remain on the top especially with the sound quality. desire for sophisticated products) and changing market dynamics (e. ease of use and reliability of their products. how will Apple continue to dominate the digital music player industry considering the growing number of well-funded competitors? How should Apple go about increasing its share of the market form mobile smart phones? How should the company improve its relatively weak position in the computer industry? How might changes in customer preferences (e. For instance..g. Specifically. 12.the competitor PC’s such as Dell & HP Apple will still have a success rate that would keep them in business for sometime. Does Apple’s strategy for its iPod business seem capable of allowing the company to remain on top of the digital music player industry over the next 5 years? As shown in exhibit 7. 11.. impending recession) affect the company’s outlook for growth? .g. Steve Jobs addressed the issue of competitors in each of its industries. What steps should Apple take to improve its corporate performance and to strengthen its position in its most important markets? Apple’s successes in 2008 are not without challenges.

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