GREAT LAKES INSTITUTE OF ENERGY MANAGEMENT & RESEARCH, GURGAON
STRATEGIC MANAGEMENT PROJECT REPORT
STRATEGY MANAGEMENT AT
APPLE, INC.
1. 2. 3. 4. 5.
PRESENTED BY: Group 11 Kapil Bhati (19) Kumar Rathnam (21) N Praveen Kumar (29) Nikhil Yadav (30) Sharath Babu (46)
Date: April 3, 2012
Contents
1. 2. INTRODUCTION .................................................................................................................. 3 APPLE: BRIEF HISTORY ........................................................................................................ 4 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 3. 3.1 Early Products
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Originally Apple Computer, the company was renamed Apple Inc. in 2007 to signify its enlarging its pie from merely selling high-end computers to include iPod, iPhone and now iPad. As its revenue and net income have shot up in recent years, Apple’s share price outperformed S&P 500 index by nearly ten times. Apple Inc. is by far the largest company in the world by market capitalization. At $565 billion (INR 28.25 trillion!) it pips Exxon Mobil, the largest upstream oil company in the world, worth $408 billion! The subject of study in this report is how sustainable is Apple’s position in its various product markets – PCs, digital music, smart-phones and tablets. We shall briefly touch upon the structure of the PC business and the role of the iPod, iPhone and iPad in Apple’s overall strategy, primarily to discuss the industry analysis, competitive positioning, and sustainability analysis. Four central issues in strategy formulation have been discussed here – 1. Evolution of the computer industry over time and its implications for strategic positioning 2. Nature of sustainable competitive advantage 3. Timing of strategic moves 4. Challenge of invigorating competitive through innovation
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Strategic Management Project Report: Apple’s Strategy
2012
2. APPLE: BRIEF HISTORY
Founders Steve Jobs and Steve Wozniak effectively created Apple Computer on April 1, 1976, with the release
In 1996, Apple was a struggling company that had lost more than 70% of its market capitalization in the past decade. Apple’s sales had fell dramatically and their new personal computers weren’t particularly popular with consumers. The return of Steve Jobs to the company was a turning point for Apple and initiated a new era for the firm. With the launch of innovative products such as the iPod, iPhone and iPad, Apple became the biggest brand in the world. Now it remained to be seen if Tim Cook would be able to continue to develop new products and maintain Apple’s success.
Steve Wozniak’s interest in electronics had grown stronger, and he began to regularly attend meetings of a group of early computer hobbyists called the Homebrew Computer Club. The knowledge that Wozniak gained from these Homebrew meetings, as well as his amazing talent, allowed him to build his own computer board, simply because he wanted a personal computer for himself. Steve Jobs took interest in this, and he quickly understood that his friend 's brilliant invention could be sold to software fanatics, who wanted to write software without the trouble of putting together a computer kit. Jobs convinced Wozniak to start a company for that purpose. Together they created the first Apple Computer on April 1, 1976.
tionally excellent companies take few risks, product leaders encourage new ventures and a steady stream of new products. Although they take security seriously, good-enough security is a guiding principle; innovation—not process—is the key to avoiding or preventing security problems. As a result, security takes a back seat to performance, is less centralized, and is not the key determinant of a product’s success. The third market discipline, customer intimacy, emphasizes customer needs and requests and excels at meeting them. Security is important for customer-intimate companies when customers express security needs. Thus, the security organizations of customer-intimate companies are less topdown than those of operationally excellent companies, and their centralized procedures involve significant customer interaction. As a result, security is built into products and services only when the customer demands security.
Apple Incorporation is one of the largest organizations dealing into Information Technology. Apple has a host of products ranging from Laptops, Desktops, Mobile Phones and Multimedia Devices. The company has been extremely innovative in the field of multimedia and it owes it success to one of the greatest innovators, Steve Jobs. The company has always believed in innovation and that is the major reason why it has been so successful in the mobile phone segment. In recent years Apple is second only to Samsung in the Global Mobile Phone industry. However the operations have been largely based in the United States and in times of recession any organization needs to focus on economies of scale and thus focus on growth
Apple Inc. is a software and electronics manufacture that was established in 1976, by Steve Jobs, Steve Wozniak and Ronald Wayne. The first computers the company manufactured were aimed at computer hobbyists, while they worked on making their computer simpler for the non-computer users. They later succeeded in creating the Apple II model which would become one of the most popular computers in the through
Apple is a global company represented in many parts of the world, but born in the United States by computer wizards by the names of Steve Jobs and Steve Wozniak who founded the company back in 1976 (Capon, 2008). The organization deals with the design and sale of computer hardware, software and offers tech support to its customers. Examples of the hardware the company manufactures and sells include mobile phones, personal computers, iPads, tablets and iTunes with associated brands, like the MacBook and iPhones that represent Apple’s driving force towards its success. It is recognized as a brand leader in consumer electronics by the world in terms of quality and customer satisfaction and despite the wide product range, Apple manages each product in a distinct way that is a single business unit (Mittan, 2010).
Apple was founded on April 1, 1976. It was founded in Cupertino, California. The founders are Steve Jobs and Steve Wozniak. In the fall of 1976, Steve Wozniak started working on a new computer. This computer was to be called Apple II. Unfortunately, Apple started to lack in funds, but they knew they were on to something. In November 1976, Mike Markkula gave the young men advice. Mike was a chip industry veteran and ex-Intel manager.
Apple Inc formerly known as Apple Computer Inc which provides corporate Server, MAC OS Systems and Operating System. Apples core product lines are the iPhone, iPod and Macintosh System. Steve Jobs and Steve Wozaniak, The founder of Apple has created the Apple Computer on 1st April 1976 and integrated in the company on 3rd January 1977, in Cupertino California. It has driven the Computer manufacturing market for more than two decades. Mr. Steve Jobs who was expelled in 1985 was return as CEO of the APPLE Inc in 1996 with new Ideas and corporate philosophy. With introduction of successful IPod Player in to 2001 Apple has again proved itself as a Market leader in consumer electronics. Latest era of extraordinary success
Apple the pursuit of perfect, it also led to the growth of its ups and downs. Jobs not willing to give up work and control anything, especially when it may affect the customer experience. But he was faced with a problem. There is a part of the process he does not control: in a store to
On his return Steve started hanging around Wozniak, the electronic genius. The Apple Computer was formed on April fool’s Day 1976, after Jobs and Wozniak created a new computer circuit board in Jobs’s family garage. The Apple 1 computer goes on sale by the summer for $666.66.
Steve Jobs and Steve Wozniak founded Apple in California in 1976. Their mission was to introduce an easy to use computer to market, which led to a computing revolution and quickly became the industry leader by selling more than 100,000 Apple IIs in 1980. After IBM entered PC market, IBM PCs, which used Microsoft’s DOS (OS), gained more market share and became the new standard for the PC industry. At the same time, Apple introduced the Macintosh in 1984. However, Apple’s net income fell 62% due to the Mac’s slow processor speed and lack of software limited sales. In 1985, Steve Jobs was forced out and John Sculley took charge of the Mac. Under the direction of Sculley, Apple
Even though Apple has encountered many setbacks, it continues to bring new and improve products to the market. Apple’s competitive strategy has been innovation. They have made an extraordinary effort developing, implementing, and executing its very unique strategy through innovation which has resulted in new product, and the enrichment of the existing ones. More specifically, Apple attempts to meet and supply the needs of a global market, by offering eager and enthusiastic consumers with innovated and high-quality products and services. Apple has employed a differentiation strategy linked to innovation with its three core products (computers, personal media player, mobile phones, tablets and other accessories). A key piece of their strategy involves meeting the needs of the converging digital electronics and computer markets. Apple has elected to implement its strategy by designing and developing proprietary operating systems and software technologies, thus allowing for strict protection of its intellectual rights.
The company started off as “Apple Computer,” best known for its Macintosh personal computers (PCs) in the 1980’s and 1990’s. Despite a strong brand, rapid growth, and high profits in the late 1980s, Apple almost went bankrupt in 1996 (Kim & Yoffie, 2010, p.1). This can be explained that Apple has become larger and more significant than other competitors put together in 1980. Because Apple failed to innovate in 1996, the company almost went bankruptcy but eventually Steve Jobs took Apple from bad situation to the company that can make billions of dollars through promoted itself as a hip alternative to other computer brands. Apple highlighted its computers as the world’s “greenest lineup of notebooks” that were energy efficient and used recyclable materials. The goal was to differentiate the Macintosh amid intense competition in the PC industry (Kim & Yoffie, p.4).
Apple’s history dates to 1974 when two men, Steve Jobs and Steve Wozniak had a vision that inexpensive home computers would soon be in demand. Two years later, Jobs and Wozniak built their first computer in Jobs’ family garage, they named it Apple I. On April 1, 1976, the Apple Computer Company was established.
This paper presents a case study of Apple Inc. Apple Inc. is a technology based corporation with emphasis on computer software and hardware (MAC and Apps), tablets (IPad), smart phones (IPhone), and mp3 plays, (ITouch). Apple Inc. has grown tremendously over the years and ever since 2001 has expanded its brand and retail stores to over 375 stores/outlets globally. The business has seventy two thousand eight hundred employees in thirty eight countries. Apple Inc. has truly become one of the most efficacious corporations within its field behind or competing with Microsoft and Google Inc.