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Table of Contents

I History of Apple.....2

II SWOT Analysis....3

III Problem Statement Q1A...5

IV Problem Statement Q1B..8

V Problem Statement Q1C.10



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I History of Apple

Apple under Steven Jobs and Stephen Wozniak

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1983, $1billion turn over from one Apple product. Bureaucratic admistrative model leading to the development of the Apple Macintosh product away from the corporate headquarters and plant. Steven Jobs innovative ability making it possible for him to spot the potential in the Graphic User Interface (GUI) which was formally developed by Xerox developers. Jobs challenge John Sculley to be part of an organisation that is responsible in changing the world than he selling sugared water at Pepsi for the rest of his life.

Apple under John Sculley


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John Sculley, previously CEO of PepsiCo, was recruited by Jobs to be Apple president in 1983 and he took over executive control. Sculley reports that Jobs challenged him: Do you want to spend the rest of your life selling sugared water or do you want to change the world? John Sculleys initial priorities were to co-ordinate product development activities, which he felt were fragmented, and to integrate these developments with existing programmes. To achieve this, power was centralized more than it had been in the past and was supported by formalized reporting procedures and new financial control systems. But preserving the important aspects of the original Apple culture. Sculley felt that Apple needed to be repositioned in the market in order to overcome the competitive threats from the Far East. Created a fun working environment as well celebrating success when milestones are achieved. 1988, changing the organisations structure from an informal and entrepreneurial management to divisional structure. Sculley was regarded as being more marketing oriented whiles Jobs was more innovative oriented. With new versions of the Macintosh, Apple moved from an education and home computer base into business Computer Company which also sold to schools and universities. Apple became a major innovator in desk-top publishing, pioneer ing the market in advance of competition from IBM and Xerox. 1990s, Apple start declining. Apple began a legal action against Microsoft. Sculley claimed that Apples ideas were being copied and used in cheaper rival products Apple sold 22 million of Macintosh computers in the 90s. 1991, strategic alliance with IBM it main rival but differences in culture made the alliance unsuccessful. New products like electronic notebooks computers and Newton blackbox were introduced.

Apple under Amelio


Amelio decided to have the Macintosh product rage (responsible for 80% of Apples revenue) in order to reduce costs and help to restore profitability. This controversial cut radically affected Apples strategy of market segmentation. In addition, six varieties of its license to other manufacturers. Allied with Adobe which could put on to a laser printer has always been the preferred machine for designers. The company was also restructured into seven profit-centre divisions: four for different hardware products, plus software, service and Internet the Macintosh has always been an ideal machine for creating Internet products. DANIEL VENUNYE TORKU
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Amelio recognised that cultural change was again an issue he believed from one where employees felt free to question, and even defy, management decisions to a more conventional style. Product managers would no longer be free to veto the strategic leader. Declining sales and falling profits were a feature of 1996, and Amelio had to shoulder some of the blame. December 1996, Apple attempted to help rectify these weaknesses of declining sales and falling profits by acquiring NeXT Software, the company formed by Apple cofounder Steven Jobs. This will enable Apple to obtain the part-time consultancy services of Steven Jobs, who would advise on product strategy.

Stephen Jobs ousted, returns


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Jobs commented: For the past ten years the PC industry has been slowly coping with the Macs revolutionary graphical user interface. Now the time has come for new innovation. The key relationships lay with other software developers who typically produced a Windows version first, and only release Macintosh versions some months later. Executives from NeXT took over senior positions at Apple. Jobs cofounder at Apple, Steven Wozniak, was also brought back as a consultant. The workforce of 13,000 was reduced to between 10,000 and 11,000. Product development, sales and marketing were streamlined. August 1997, Microsoft invested $150 million in Apple and the two companies formed a partnership. 1998 Apple became profitable again. G3 version of the Mac was faster and cheaper than equivalent Windows-based PCs, a very different situation from the earlier years. May 1998 Apple announced its radical new iMac. At its launch in August it flew off the shelves. In 1999 Apple launched a new range of notebook computers in a similar style and packaging to the iMac. Jobs appeared to have tapped into a new market segment the Generation Y buyer that likes individuality.

II SWOT Analysis To know that Apple is being managed effectively from a strategic point of view, one need to find out first, that its managers appreciated fully the dynamics, opportunities and threats present in their competitive environment, and that they were paying due regard to wider societal issues; second, that the organizations resources (inputs) were being managed strategically, taking into account its strengths and weaknesses, and that the organization was taking advantage of its opportunities. A) Strength 1. 1 $1 billion turn over within seven years of establishment. 2. User friendly products. 3. Pioneering the Graphic User Interface (GUI) 4. High quality product 5. Product diversification 6. Customers of apple are loyal 7. Innovation 8. Creativity B) Weakness 1. Bureaucratic administrative style DANIEL VENUNYE TORKU
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2. Culture change 3. Not meeting schedule 4. Declining sales 5. Benevolent company 6. High premium prices for products 7. Less concentration on marketing 8. Unstable management 9. Niche market strategy 10. Low market share C) Opportunity 1. More people gaining access to computer (Less than 9% access to computer) 2. Less expensive product line with quality 3. Exploring Core competence ( product differentiation, value creation, innovation, virus free systems and quality) 4. Product flexibility for consumers 5. More marketing strategies 6. Forward integration strategy by opening more retail shops in different countries. 7. License more of it software to other PC manufacturers 8. More strategic alliance D) Threat 1. Threat from its major competitors like Microsoft, IBM and Far East. 2. Ideas being copied by competitors 3. The continue success of Microsoft 4. Mergers and Acquisition from competitors 5. Substitute products 6. Low prices of competitors 7. Technology advancement in the PC industry.


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III Problem Statement Q1A Evaluate Apples latest turn around with respect to reliability and sustainability Reliability: (Fred R. David 2003) the ability of an organisation meeting schedules or demands of customers. Sustainability: (Thompson and Martin 2000) a sustain edge over competitors in an industry, usually achieved by first creating a valuable difference and then sustaining it.

Matching Success factors (ability to meet demand and gaining competitive edge) and Core Competence (Strength and Ability to Spot Opportunity) Internal and External Factors Evaluation (TOWS) Strength(S) Internal Factors 1. 1 $1 billion turn over within seven years of establishment. 2. User friendly products. 3. Pioneering the Graphic User Interface (GUI) 4. High quality product 5. Product diversification 6. Customers of apple are loyal 7. Innovation 8. Creativity SO Strategies 1. Bureaucratic administrative style 2. Culture change 3. Not meeting schedule 4. Declining sales 5. Benevolent company 6. High premium prices for products 7. Less concentration on marketing 8. Unstable management 9. Niche market strategy 10. Low market share WO Strategies Apple should focus more on marketing and awareness programmes to do away with the current niche strategy which is contributing to the low market share. Weakness(W)

External Factors

Opportunity(O) 1. More people gaining access to computer (Less than 9% access to computer) 2. Less expensive product line with quality 3. Exploring Core competence ( product differentiation, value creation, innovation, virus free systems and quality) 4. Product flexibility for consumers 5. More marketing strategies

Apple should concentrate on growth in order to increase its market shares by developing more and new innovative products, opening more retail shops in developed and emerging markets like Africa to make sure that the shelves are stocked with enough of the company's goods to meet demand.and provide better after sales service in order to


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6. Forward integration make their customers more strategy by opening more brand loyal. retail shops in different countries. 7. License more of it software to other PC manufacturers 8. More strategic alliance

Threat(T) 1. Threat from its major competitors like Microsoft, IBM and Far East. 2. Ideas being copied by competitors 3. The continue success of Microsoft 4. Mergers and Acquisition from competitors 5. Substitute products 6. Low prices of competitors 7. Technology advancement in the PC industry. Table 1

ST Strategies Apple should keep its cost optimise by strategic alliance and make high cost products cheaper.

WT Strategies Apple should focus on producing compatible products and also deal with the unstable managerial issues by engaging a strategic leader like Steven Jobs who is very creative and innovative.

(Hamel and Prahalad 1993) also argues that Competitive advantage, then, does not come from simply being different. It is achieved if and when real value is added for customers. This often requires companies to stretch their resources to achieve higher returns. Improved productivity may be involved; ideally employees will come up with innovations, new and better ways of doing things for customers. The Stalwart (2006), a US business journal quoted, Om Malik an investor analyst saying Om Malik dismisses the notion that Apple will collapse for the same reasons they lost their lead in the computer market 20 years ago: The difference is the software that is being used to create a user experience. The user experience is the new competitive advantage, not the chips etc. The above statements show that for a sustainable and reliable strategy for Apple to continue doing well as it is doing now, there will be a need for Apple to come out with strategies that will give them competitive advantage in the PC market. There will be need for more innovation, products improvement and ability to meet demand as summarised at News.cnet (1988) the primary challenge that remains for the company, according to analysts, is not developing a strategy, but rather executing one. That means the company has to finish building out its product lineup with a portable PC for consumers, and make sure that the shelves are stocked with enough of the company's goods to meet demand. All these strategies are what John Thompson called The Competitive Advantage through Customer Commitment as shown in Fig.1 below.


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Value for Value-for money/price money/price: Driven Driven by efficiency by efficiency and and cost management cost management

High level of Service: General and Customer Specific

Commitment to customers through positioning and change

Image: The hidden values from branding, continuous improvement

Product/Service performance: Quality, Reliability and Speed of Change

From Fig1, For Apple to remain reliable and sustain its current rate of growth, there will be a need for: 1. Commitment to Customers through Positioning and Change : The closer a business is to the customer the more the business understands the customer. This is the reason why I stated from Table1 under the SO Strategy that Apple needs to expand by establishing more retail shops closer to its customer in order to sustain the demands for its products. There will be a need for meeting schedules. 2. Cost Management Strategy: it is necessary giving customers value for money and at the same time reducing their operation cost in order not to pass the excess cost to the consumer in terms of high price of its products, which turns to create a competitive gap which their competitors can easily fit by low prices, as it happened in the past when Microsoft gave consumers a substitute low price product. Strategic alliance will perfectly deal with the cost issue and make Apple very competitive in terms of price. 3. Product Differentiation and Improvement Strategy: Apple should continue in the innovatory product differentiation and improvement strategy which has contribute to the their good public image but find more cost effective ways of funding its research and development (R&D), similar to the 1998 strategic alliance with Microsoft. 4. People and People-Driven Processes/Strategies: are the real sources of sustained advantage, because it is these that are most difficult for rivals to copy. Apple human resources must be convinced that they are important and that their contribution is valued for the continue success of Apple, through an appropriate reward system otherwise they may not deliver and improve the all-important services. Failure to do this will always prove difficulty in Apple, where there is a culture need for cost management and resource savings. 5. Organizational Culture/Leadership Strategy: (Thompson 2000) when any group of people lives and work together for any length of time, they form and share certain beliefs about what is right and proper. They establish behavior patterns based on their beliefs, and their actions often become matters of habit which they follow routinely. These beliefs and ways of behaving constitute the organizations culture. The culture of bureaucratic administration model really affected Apple in the past, for sustainability and reliability Apple need to do away with this administrative model which do not empower employees DANIEL VENUNYE TORKU
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to be innovative and for technology biased company like Apple, employees entrepreneurial skills empowerment is very crucial to sustainability and reliability. (Dr Hugo M Sekyra, CEO and Chairman, Austrian Industries) A real manager has to be a good leader in the sense that he has to embody an open minded attitude of leadership in himself, in his fellow managers and even in the heads of each employee of his organization. Leadership, therefore, means to enable and help people to act as individual entrepreneurs within the frame of a commonly born vision of the business. A bad manager, on the other hand, is more an administrator who follows severe rules and customs within a stiff bureaucratical hierarchy. 6. Organizational Structure and Policies Strategies: Policies are designed to guide the behaviour of managers in relation to the pursuit and achievement of strategies and objectives. They can guide either thoughts or actions, or both, by indicating what is expected in certain decision areas. One of the weaknesses of Apple is policies conflict, there is a need for outlining clear strategic policy plan for finance, marketing human resource etc With these Reliability and Sustainability strategies, Apple should be able to lead the PC market again.

IV Problem Statement Q1B In the context of Apples development, do you agree with the view that the right strategies depends upon personal vision? Vision Statement Apple is committed to bringing the best personal computing experience to students, educators, creative professionals, and consumers around the world through its innovative hardware, software, and Internet offerings. Mission Statement Apple Computer is committed to protecting the environment, health and safety of our employees, customers and the global communities where we operate. We recognize that by integrating sound environmental, health and safety management practices into all aspects of our business, we can offer technologically innovative products and services while conserving and enhancing resources for future generations. Apple strives for continuous improvement in our environmental, health and safety management systems and in the environmental quality of our products, processes and services. Corporate Strategy Retrenchment through cutting expenses, downsizing, layoffs and shuffling of top executive. Business Strategy y Product Differentiation y Value Creation y Innovation y Quality Yes, I do agree with the view that the right strategies depend upon personal vision and I support my stand with the following report. News.cnet (June 5, 1998 5:00 am PDT), reports It's been quite a year for Apple Computer, which appears to have dug itself out of a money-losing hole. After reporting several quarters of losses and falling revenue, the company has cut expenses, downsized, shuffled its top executives, and found much-needed leadership in Steve Jobs, who assumed control of the hemorrhaging company last September. The Apple cofounder developed a plan for the ailing operation, in an DANIEL VENUNYE TORKU
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attempt to recapture some of the glory of the once-powerful company's heyday, which breathed innovative life into what is now a thriving mecca called Silicon Valley. Apples woes was all because of lack of visionary/entrepreneur leader, this can be seen clearly from the history of Apple, in that, Apple was profitable ($1bilion turnover) right from the onset when there was a presence of a vision/entrepreneur leadership role of Steven Jobs. As soon as Jobs left Apple, Apples problem begun. Visionary leadership is often associated with an organization that might be described as entrepreneurial, and many visionary leaders are legitimately entrepreneurs, but not always. Moreover, it is not a requirement that, to be effective, a strategic leader has to be personally visionary. Mintzberg et al. (1998) contend that for a visionary strategic leader, strategy is a mental representation of the successful position or competitive paradigm inside his or her head. It could be thought through quite carefully or it could be largely intuitive. This representation or insight then serves as an inspirational driving force for the organization. The vision or idea alone is inadequate; the leader must persuade others (customers, partners, employees and suppliers ) to see it, share it and support it. Flexibility will always be an inherent factor, and detail emerges through experience and learning. Bolton and Thompson (2000) define an entrepreneur as person who habitually creates and innovates to build something of recognition and value around perceived opportunities. This definition perfectly fit Steven Jobs more than all the former CEOs of Apple. Steven Jobs was able to see the opportunity, the GUI will bring into the computer industry when it was first developed by Xerox. A company whose vision is to change world through innovation cannot afford to do away with the entrepreneurial ability of Steven Jobs. Secondly, Steven Jobs displayed what is called strategic or visionary leadership abilities, to dug out Apple from a money loosing hole, some of his visionary characteristics include: 1. The ability to think ahead and spot opportunities. 2. Making things happen. 3. Engage the support of other people, Job seeked the support of Bill Gates to develop the GUI. 4. Has the overall responsibility of clarifying corporate/business directions. 5. Ensure that strategies are implemented through the decision that he has made on structure, style and systems. 6. Creating climate that facilitate emergent change. 7. Building effective team to support him( NeXT executives taking over top positions in Apple) From my point of view, for Apple to continue to make an impact on society and for that matter profit making organisation, strategic visionary leadership is a necessity. Relating Corporate Vision with Corporate/Business Strategy Corporate/Business Strategy Corporate/Business Strategy 1.Product Differentiation 2.Value Creation 3.Innovation 4.Quality Corporate Vision 1. Apple should make their software compatible Corporate Vision Apple is committed to bringing the best with Microsoft and other software manufacturers, personal computing experience to students, this will increase their market shares among educators, creative professionals, and students and educators because public perception consumers around the world through its of Apple concerning quality and product innovative hardware, software, and Internet improvement is very high. offerings. 2. Bringing the business closer to the customer by opening more retail shops like their competitors. DANIEL VENUNYE TORKU
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3 Increase advertisement and marketing like the industry giants e.g. Microsoft.

What Will Happen If Apple Should Continue With the Current Product Differentiation and Niche Market Strategies? Advantages Disadvantages 1. Innovative Product. 1. Low Market Share. 2. Quality Products 2. High Cost of Production. 3. Differentiated Products. 3. Competing Against Giant of the Industry. 4. Brand loyal Customers 4. Less Emphasis on Marketing. 5. High Cost for Research and Development. The disadvantages far out weight the advantages, to be operating at a high operating cost with a low market share is a loss. The best strategy for Apple is to seek a strategic alliance with one of the industry giants; this in my point of view will increase their market share at a low production cost. Advantages Disadvantages 1. Low Cost of Production. 1. Internal Cultural Clash. 2. Low Cost of Research and Development. 3. High Market Share through Competitive Advantage. 4. Product Innovation. 5. Quality Products. 6.Brand loyal Customers 7. Product Differentiation Internal Cultural clash can easily be turned around for by an entrepreneurial leader like Steven Jobs, example is NeXT executives taking over some key role positions in Apple. Mintzberg et al. (1998), visionary entrepreneurs often, but not always, conceptualize the winning strategic position as a result of immersion in the industry. They may simply have a genuine interest; equally they may have worked in the industry for some length of time. Their secret is an ability to learn and understand, making sense of their experiences and the signals they see. While some people would never be able to make sense of a pattern of strategic signals pertinent to an industry, others learn very quickly. V Problem Statement Q1C In manufacturing creativity, innovation and pioneering are the key strategies to success. Critically examine this statement. Successful entrepreneurs and entrepreneurial organizations often find new products and new needs ahead of both their rivals and their customers. Market research can tap into issues that are important for customers, but it is unlikely to provide the answers. Creativity, pioneering and innovation stimulated within the organization are more likely to achieve this. Entrepreneurs and entrepreneurial organizations thus create proprietary foresight from public knowledge by synthesizing information and environmental signals and creating new patterns and opportunities. Creativity Strategy: Ann Herrmann-Nehdi, CEO of Herrmann international, define creativity as a series of thinking processes that can be applied and learned. Creativity strategy is no longer optional in todays rapidly changing business environment. Now considered essential to maintaining a competitive edge, many organizations are seeking ways to unleash new perspectives and fresh thinking about their products, markets, challenges and competitors. Understanding the thinking styles involved in the different phases of the creative and strategic thinking processes (not to mention the quality process) allow individuals and organizations to more effectively take advantage and apply the brain power available to them create things to DANIEL VENUNYE TORKU
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suite the changing environment. The ability of using the brain power to create things is what is called Invention. Pioneering: is using creativity and innovation to first come out with a product to gain competitive edge over your competitors. Innovation Strategy: is managing your business towards the future. The process of being proactive and discovering new opportunities that fit the changing needs of a dynamic market place. (Johnston and Bate). Strategy innovation and its focus should be senior management responsibility and a core capability of any company. Finding innovative ways to deliver high value to customers will create new market and growth opportunities, giving the company move advantage, like Apples first move advantage of the GUI in the PC market. It can also provide differentiation from competition, which keeps margins and profit strong. Apple invest heavily in Research and Development (R&D) to identify innovative new products that can fuel future company growth but it also make sense that Apple should also invest resources to explore ways creating innovative strategy for future sustainability and reliability. Sources of the Innovative Strategy This intellectual foresight has a number of possible sources, acco rding to Hamel and Prahalad (1994): 1. It can be a personal restlessness with the existing status quo. 2. It can be a natural curiosity (which the education system does not manage to stifle!) that leads to creativity. Sometimes the entrepreneurial people concerned have a childlike innocence in the questions they ask, and the process is stimulated by a wide network of contacts. 3. It may be willingness on the part of certain individuals to speculate and manage the risk of investigation. Invention has to precede learning. 4. It is sometimes a desire to change things and leave footprints. 5. Often there is an empathy with the industry and market concerned, coupled with 6. The ability to conceptualize what does not yet exist: you cant create a future you cant imagine. The ability to creates and innovates to build something of recognition and value around perceived opportunities is what is termed entrepreneurship (Bolton and Thompson). The argument is that entrepreneurship in the organization, both at the level of the leader and throughout the whole organization, is required to ensure that resources are developed and changed and used to exploit the windows of opportunity ahead of rival organizations. Horovitz (1997) contends that organizations should look for the problems before they even arise, by questioning what the (possibly very successful) organization is doing wrong. At times it is important to abandon products, services and strategies which have served the organization well in the past, as they are not the future. De Geus (1997) contends that businesses need to become living organizations if they are to enjoy long and sustained success. For an organization to look for problems before they arise that organization must be very innovative and must have the following qualities: 1. Clear direction and purpose (awareness of its identity) 2. Strategic positioning (its sensitivity to its environment) 3. The management of change (its tolerance of new ideas) and 4. The efficient use of its capital investment. People then must be seen as key assets for an organization to be towing the line of creativity, innovation and pioneering Rosabeth Moss Kanter (1989) clearly supports this view when she argues that the whole organization holds the key to competitive advantage. She suggests that five criteria are found in successful, entrepreneurial organizations: The 5Fs. 1. Focused: on essential core competencies and long-term values DANIEL VENUNYE TORKU
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2. Flexible: searching for new opportunities and new internal and external synergies with the belief that ever-increasing returns and results can be obtained from the same resources if they are developed properly and innovative 3. Friendly: recognizing the power of alliances in the search for new competencies 4. Fast: and able to act at the right time to get ahead and stay ahead of competitors 5. Fun: creative and with a culture which features some irreverence in the search for ways to be different; people feel free to express themselves. Therefore, in developing strategies for technological sustainability through innovation and pioneering, according to Pinchot (1985), the key lies in engaging peoples efforts and energy for championing, capturing and exploiting new ideas and strategic changes. This must stretch beyond the most senior managers in the organization, who do not have a monopoly on good ideas. On the contrary, the potentially most valuable and lucrative ideas are likely to come from those people who are closest to the latest developments in technology or to customers. Suggestion schemes are linked in, but on their own do not constitute intrapreneurship. The ideas need to be taken forward, and they can only be developed if the potential intrapreneurs are able to obtain the necessary internal resources and, moreover, they are willing to do something. This in turn requires encouragement and appropriate rewards for success. People must feel involved in the process and comfortable that they are being supported. Intrapreneurship cannot work where people feel frozen out or dumped on. Churchill (1997) summarizes the philosophy as skills following opportunities. People in entrepreneurial businesses see the opportunities and set about acquiring the necessary resources. The whole process of change then becomes gradual and evolutionary as shown fig.2 below.


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Path 1: Intrapreneurship/corporate entrepreneurship. A flow of ideas from inside the organization Path 2: Fresh ideas from an entrepreneurial strategic leadership
Realizing the opportunity Positioning Building value

Planning the business

Strategy creation
The entrepreneur
-Realizing a vision or idea -Activation through engagement and action

Resource acquisition

Team and organization building

Strategic opportunity

Strategy implementation
Emergence and innovation Intrapreneurship to sustain growth



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8. Hertzberg, F (1968) One more time how do you motivate employees? Harvard Business Review, JanuaryFebruary. 9. Johnston, R. E., Bate, J. D. The power strategy innovation, anew way liking creativity and innovation. 10. Mintzberg, H (1987) Crafting strategy, Harvard Business Review, JulyAugust. 11. News. net. (1998) 12. Porter, ME (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors, Free Press. 13. Swartz. J. (1999) Gravity Has No Hold on Apple Turnaround / Its bottom line showed the most improvement among the 500 Chronicle Staff Writer 14. Stalwart. (2006) Apples stunning Return. 15. Thompson, J, Martin, F. Strategic Management, Awareness and Change.


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