PROJECT REPORT ON

‘Steve Jobs vs John Sculley: Apple’

Submitted in Partial Fulfillment of the Requirements for the Master of

Business Administration

2020-2022

Prepared By:

Harsh Vardhan 20202131

Rohit Raj 20202150
Sreyashi Dutta 20202163
Subham Pratik Mishra 20202164
Sweety Jha 20202169
Sailesh Padhi 20202303

MBA 2nd Semester

Prepared for:

Mr. Ashok Kumar Sar

KIIT School of Management.

KIIT University, BBSR

Table of Contents:-

1. Acknowledgement
2. Company History
3. About Steve Jobs
4. About John Sculley
5. The Case
6. Case Analysis
7. Conclusion
8. Bibliography
Acknowledgement:

Acknowledgement is the expression of the deep sense of gratitude. The desire for
hard work and dedication is essentially the key to success. We would like to thank
all the resources and people who contributed from the beginning to the end for
completion of this project. Most of all we would like to extend our heartfelt
gratitude and appreciation, which words cannot describe, to Prof. Ashok Kumar
Sar, the guide and friend like figure for the immense support in every possible
way.
Company History:
Apple Computers, Inc. was founded on April 1, 1976, by college dropouts Steve Jobs and Steve Wozniak,
who brought to the new company a vision of changing the way people viewed computers. Jobs and
Wozniak wanted to make computers small enough for people to have them in their homes or offices.
Simply put, they wanted a computer that was user-friendly.

Jobs and Wozniak started out building the Apple I in Jobs' garage and sold them without a monitor,
keyboard, or casing (which they decided to add on in 1977). The Apple II revolutionized the computer
industry with the introduction of the first-ever color graphics.1 Sales jumped from $7.8 million in 1978 to
$117 million in 1980, the year Apple went public.

Wozniak left Apple in 1983 due to a diminishing interest in the day-to-day running of Apple Computers.
Jobs then hired PepsiCo's John Sculley to be president. However, this move backfired and after much
controversy with Sculley, Jobs left in 1985 and went on to new and bigger things. He founded his own
company NeXT Software and he also bought Pixar from George Lucas, which would later become a huge
success in computer animation of such movies as Toy Story, A Bug's Life, Monsters, Inc., and Finding
Nemo.

Through the rest of the 1980s, Apple was still doing well and in 1990 it posted its highest profits yet. This
was, however, mostly due to the plans that Jobs had already set in motion before he left, most notably his
deal with a tiny company by the name of Adobe, creator of the Adobe Portable Document Format (PDF).
Together the two companies created the phenomenon known as desktop publishing.

Back in 1985 Sculley turned down an appeal from Microsoft founder Bill Gates to license its software.
This decision would later come back to haunt him because Microsoft, whose Windows operating system
(OS) featured a graphical interface similar to Apple's, became their toughest competition in the late 1980s
and throughout the 1990s.

Over the course of a few years, Apple's market share suffered slowly after its peak in 1990 and by 1996,
experts believed the company to be doomed. It was not until 1997, when Apple was desperately in need
of an operating system, that it bought out NeXT Software (Jobs' company) and the board of directors
decided to ask for some help from an old friend: Steve Jobs. Jobs became an interim CEO, or iCEO as he
called himself (Jobs was not officially the CEO until 2000). Jobs decided to make some changes around
Apple. He forged an alliance with Microsoft to create a Mac version of its popular office software.

Not long after this decision was the turning point for the company. Jobs revamped the computers and
introduced the iBook (a personal laptop). He also started branching out into mp3 players (iPod) and media
player software (iTunes). This was Jobs' best move yet. While computers are still an important part of
Apple, its music related products (i.e. iPod and iTunes) have become the company's most profitable
sector. Apple has also recently released the iPhone, a cellular phone, and the Apple TV. While Steve Jobs
died October 5, 2011, Apple continues on with his legacy.

Apple Inc. has pioneered its way through the computer industry—not once, but multiple times throughout
its existence. It believes in pushing the limits of creativity in order to produce interesting and valuable
products for society. After more than 30 years, it is undeniable that Apple "has had a profound impact on
technology, innovating and influencing not only how we use computers but the activities for which what
we use them.
About Steve Jobs:

Steve Jobs, the American businessman and technology visionary who is best known as the co-founder,
chairman, and chief executive officer of Apple Inc, was born on February 24, 1955. His parents were two
University of Wisconsin graduate students, Joanne Carole Schieble and Syrian-born Abdulfattah Jandali.
They were both unmarried at the time. Jandali, who was teaching in Wisconsin when Steve was born, said
he had no choice but to put the baby up for adoption because his girlfriend's family objected to their
relationship. The baby was adopted at birth by Paul Reinhold Jobs (1922–1993) and Clara Jobs (1924–
1986). Later, when asked about his "adoptive parents," Jobs replied emphatically that Paul and Clara Jobs
"were my parents." He stated in his authorized biography that they "were my parents 1,000%." Unknown
to him, his biological parents would subsequently marry (December 1955), have a second child, novelist
Mona Simpson, in 1957, and divorce in 1962. The Jobs family moved from San Francisco to Mountain
View, California when Steve was five years old. The parents later adopted a daughter, Patti. Paul was a
machinist for a company that made lasers, and taught his son rudimentary electronics and how to work
with his hands. The father showed Steve how to work on electronics in the family garage, demonstrating
to his son how to take apart and rebuild electronics such as radios and televisions. As a result, Steve
became interested in and developed a hobby of technical tinkering. Clara was an accountant who taught
him to read before he went to school.

Jobs's youth was riddled with frustrations over formal schooling. At Monta Loma Elementary school in
Mountain View, he was a prankster whose fourth-grade teacher needed to bribe him to study. Jobs tested
so well, however, that administrators wanted to skip him ahead to high school—a proposal his parents
declined. Jobs then attended Cupertino Junior High and Homestead High School in Cupertino, California.
During the following years Jobs met Bill Fernandez and Steve Wozniak, a computer whiz kid. Following
high school graduation in 1972, Jobs enrolled at Reed College in Portland, Oregon. Reed was an
expensive college which Paul and Clara could ill afford. They were spending much of their life savings
on their son's higher education. Jobs dropped out of college after six months and spent the next 18 months
dropping in on creative classes, including a course on calligraphy. He continued auditing classes at Reed
while sleeping on the floor in friends' dorm rooms, returning Coke bottles for food money, and getting
weekly free meals at the local Hare Krishna temple In 1976, Wozniak invented the Apple I computer.
Jobs, Wozniak, and Ronald Wayne, an electronics industry worker, founded Apple computer in the
garage of Jobs's parents in order to sell it. They received funding from a then-semi-retired Intel product-
marketing manager and engineer Mike Markkula. Through Apple, Jobs was widely recognized as a
charismatic pioneer of the personal computer revolution and for his influential career in the computer and
consumer electronics fields. Jobs also co-founded and served as chief executive of Pixar Animation
Studios; he became a member of the board of directors of The Walt Disney Company in 2006, when
Disney acquired Pixar. Jobs died at his California home around 3 p.m. on October 5, 2011, due to
complications from a relapse of his previously treated pancreatic cancer.
About John Sculley:

John Sculley was born on April 6, 1939, in New York City, New York, United States. He is a renowned
American businessman, investor, and entrepreneur. He was the president of Pepsi-Cola from 1977 to
1983 making him the youngest CEO ever to be appointed in the company.
John later became the Chief Executive Officer of Apple Computer Inc. from April 8, 1983, until 1993.
He became the highest paid CEO as at May 1987, with his annual salary at 10.2 million US Dollars. He
still serves as a consultant for startups, particularly in the healthcare industry.

Steve Jobs who was the president of Apple Computer Inc. then, approached him and lured him to be part
of the company. In 1983, he was appointed as the chief executive officer (CEO) of Apple Inc. Although
he was not privy to matters of technology, his marketing strategies were a plus to Apple Inc.
However, in 1984, the company recorded low sales on the newly launched Apple Macintosh which in
turn affected the relationship between Jobs and Sculley. In 1985, after the intervention of the board of
directors, Jobs stepped down as the head of the Macintosh sector and eventually left the company.
Although Sculley was blamed for being the cause of Jobs’ untimely resignation, John Sculley improved
the sales of the company in just a few years. He improved the Macintosh by introducing desktop
publishing technology and made adjustments on the color capabilities of the Macintosh 2. He also
established the portable PowerBook series which gained a wider market range.

However, he was criticized for not lowering the prices of the products and also refusing to license the
Apple software. In his ten year tenure, he improved the market margin of the company from 800 million
US Dollars to 8 billion US Dollars. In June 1993, the board of directors also forced him to step down
from his position as the CEO. He eventually resigned officially in October of the same year and was
succeeded by Michael Spindler who was serving as Chief Operating Officer.
The Case:

Steve Jobs, a driven young college dropout, co-founded Apple in 1976 at the age of 21.

He was part of the company’s remarkable road to success for seven years until his famous exit due to
power and control clashes with John Sculley. Two years earlier Sculley, a successful CEO at Pepsi Cola
Co., was brought in by Jobs as CEO at Apple for his marketing skills to make the consumer products
more profitable and manage Jobs. However, it became difficult to keep Jobs under control. He was a
perfectionist that would drive others to work in unethical circumstances and no mercy on work that was
under par for him. Not some one you might readily want to work for.

The board had to decide to sideline him. After a dramatic confrontation between Jobs and Sculley, Jobs
left for a couple days of and said he’d be back. Only to find that the Apple board had changed the
organization chart with no space for Jobs left in it.

When Sculley came in, he brought in the motto of competing with IBM and reaching to customers at
home and schools apart from professionals. He reorganized the company that was divided based on
products. He made the division based on functional units. Having product-based units had caused
competition among these teams and their market audience turned out to be same due to lack of
communication among the divisions. By having functional based divisions, Sculley brought in stability
and harmony among teams. In his tenure, he was able to increase Apple’s revenue from $800 million to
$8 billion. He had an analytical and traditional approach to being a CEO.

However, projects started failing. There were too many projects running simultaneously and a lot of
capital went in them even if they did not give in good returns. That’s when Apple’s downfall started. In
1993, Sculley resigned. Shortly after the company had another two CEOs and after Gil Amelio, the 3rd
CEO of Apple, the company had the lowest stock price in 12 years. Maybe they should not have fired
jobs after all?

This is where Jobs stepped in as interim CEO and changed the company around. It is said that had Steve
Jobs not taken the reigns in his hand in 1997, Apple would have vanished. He came in and first halted the
failing projects and those which had no market value. Jobs was a minimalist in his approach and gave a
lot of importance to aesthetics. He wanted everything perfect. He came with a vision to “change the
world” with Apple. This time he was more experienced than what he was a decade ago, but no less
focused and intolerant of anything that came in the way of that focus.

After leaving Apple, Jobs went traveling, searched his options and ultimately started NeXT. They
produced personal computer with high-end industrial design. Only the software was successful though.

Sculley took over Apple and led the company to newer heights. Jobs took over when other CEOs before
him had failed to get the company back on its feet. Sculley came in at the right time and later when Jobs
came back he had gotten more management and executive experience. He stayed true to his own style and
original vision that resulted in the products we see today. What is required of a CEO is the vision of
change. Jobs breathed the motto to “change the world” into Apple from the start and made that part of it’s
DNA. He is a co-founder of Apple, but the company might have just remained “Camp Runamok” (as it
was called) had Sculley not come along. It is all about the right style of management at the right time. We
believe they both served well and played an important part in taking the company to where it is today.

Case Analysis:
1. Critical events:
 Sculley wanted to maintain high cost for Macintosh for profitability while Jobs wanted to make it
more affordable. 
 Employees wanted Sculley to take control of organization, and give a stern message to Steve
Jobs.
 Sales of Macintosh started to disappoint Steve Jobs and he started to lash almost every other
manager he saw during the day.
 Mid-level managers started to unite against him, for a revolt
 According to Jobs, Sculley was the problem because he had almost no knowledge of computers
and was incapable of running company.
 In front of all executives after some blames put on each other, a massive decision was there to be
taken Steve Jobs or John Sculley?
 Board favored Sculley, they thought that John Scully’s vision for Apple is right and they
supported him.

2. Results:
 Macintosh failure
 All investors of apple were against jobs 
 Steve Jobs had to leave Apple and his Macintosh team
 His beloved position of Macintosh was given to Gassée
 All his dreams were made to dust
 After leaving Apple, Jobs founded NeXT 

3. Ethic Tests:
Conclusion

Under Sculley’s leadership, Apple sunk down like a ship with a hole. Apple had lost its market share and
the respect that came with it, the company was no more innovative, having not actually created anything
after Jobs left. Realising their mistake, the Board ousted Sculley and bought NeXT for a handsome price
and requested Jobs to become CEO of Apple again, which he declined but agreed to become interim
CEO, or iCEO as people referred to him.

Upon his second coming to Apple in 1997 after Apple bought Next in 1996, Steve had definitely learnt
from his first stint at Apple and the experiences of success at Pixar and the shortcomings at Next. He took
drastic measures to make Apple computers healthy again. Up to that point Apple had forgotten what had
made it successful- its innovative force and the bold aesthetics that came with it and its rebel attitude. He
purged the board of old ineffective members and brought in a new one. He started to gather an
extraordinary amount of information about the company, getting to know every project it was working on
and every services it provided. He was micro-managing at a very high level. His first impression was that
Apple got lost by working on too many products. Gil Amelio had cut the number of R&D projects from
350 to 50. Steve cut it from 50 to a dozen. He brilliantly understood that for Apple to succeed, it had to
focus on a very small number of products, but they had to be great products.

With the Think Different Campaign he made sure that people knew that Apple-the innovative and non
conformist company was back. His showmanship could make people believe that Apple products were
not just products but cult objects or rather a way of life. He had gained modesty and maturity and he
understood the role his team played in developing the products for which he never forgot to thank them at
the end of his keynote speeches unlike the Macintosh release in 1984 where he had taken all the credit for
the design of the machine. With his legendary reality distortion field, he could exert his knowledge,
charisma and persistence to convince anyone of anything. He could make people do things they they
thought was impossible. Lastly, he had a great intuition for what people want. He did not rely on market
research. He either redefined or created new product categories with products which were backed by an
unparalleled team at Apple with an expensive creative process which was monitored by Jobs himself.
With his unique design sense he had some great insights into the products which made them the design
gems they are.

What made Apple different, said Sculley, was its goal to create, in Jobs’ words, an “insanely great
consumer experience.”  Jobs was clearly a genius, but one who never “let the laws of physics get in the
way of his ambitions to put a dent in the universe.”
Bibliography:

 https://www.investopedia.com/articles/fundamental-analysis/12/steve-jobs-apple-
story.asp#:~:text=Steve%20Jobs%20was%20rich%20and,called%20Pixar%20from%20George
%20Lucas.
 https://www.forbes.com/sites/elizabethmacbride/2019/06/24/a-conversation-with-john-
sculley-ceo-of-apple-pepsi-and-now-an-investor-in-killer-ai-platforms/?sh=5fa981273515
 https://www.marketwatch.com/story/john-sculley-who-turned-around-pepsi-and-apple-has-a-
new-cause-2019-04-25
 https://en.wikipedia.org/wiki/Apple_Inc.