Executive Summary Apple computer became Apple Inc. in January 2007. Their major focus was on the PC but recently the started to move towards a more diversified product offering. Apple has an up and down history due to the constant change at the top which lead to declining market shares. Since Steve Jobs took back control of Apple, there was emergence in the company to diversify. He streamlined processes and reduced product lines in order to specialize in specific niches based on consumer feedback. Apple is doing a good job in diversifying its portfolio by adding the iPod, iPhone and Apple TV. By continuing to invest in R&D and new product development, Apple will surely continue to improve its market share and create new products With new technologies continuing to be developed and with the success Apple had on differentiation, Apple should have no problem being competitive in many years to come.
Problem Statement Apple Inc., had an up and down history. They used to charge a high price for their products but the issue was they were not able to make the consumers perceive their products to be “cool” enough or worth it to buy the same PCs for such a premium price as opposed to their competitor’s products. Also, the constant change in their top level management led to the use of different strategies which only caused more confusion in the firm – nobody really knew where Apple was going until Steve Jobs came back into the picture.
Summary of Facts Steve Jobs and Steve Wozniak founded Apple in 1976. A few months later they took on a new partner named “Mike” Markula, who was the experience businessman on the team. Their main mission was to bring a user friendly computer to the market. Shortly thereafter, the Apple II launched and made Apple the industry leader and thus led the Apple’s IPO in 1980. The landscape changed in 1981 when IBM entered the PC market. The IBM PC was an open system that the producers could clone. This led to Apple’s market share dropping sharply to 6.2% in 1982. In 1984, even though Apple introduced the Macintosh, its slow processing speed and lack of compatible software limited the sales. Net income continued to fall between 1983 and 1984m which ultimately led to the board in removing Jobs from an operational role. This would usher in the John Sculley years (1985-1993). Sculley tried to make Apple a leader in desktop publishing as well as education. This lead to a strong push to bring Apple into the corporate world. Sales exploded, which turned Apple into a global brand. Moving forwards, Sculley formed a joint venture with IBM with the goal of creating a new OS and new multimedia applications. Apple committed to switching from the Motoroal microprocessor line to IBM’s new Powerchip, while IBM agreed to license its technology to Motorola. This major initiative by Sculley was to drive down costs. This was done by shifting much of the manufacturing to subcontractors. Unfortunately, these efforts were not enough as Apple’s gross margin dropped to 34%, which was 14% below the company’s 10 year average. This ultimately led to Sculley leaving Apple for good. Like Sculley, Spindler and Amelio tried to reinvigorate the education and desktop markets. Spindler, however, rejected the plan to put the Mac OS on Intel chips and announced instead that Apple would license a handful of companies to make Mac clones. The main goal was to gain international growth under the Sprindler regime but he failed to do so miserably. Later on, Gilbert Amelio came into the scene and returned Apple to its premium price differentiation strategy. His plans worked pretty well but not good enough. And so finally, the job was given back to Steve Jobs to take control of Apple again and lead the firm to place where they can be truly proud of.
Analysis of Facts In order to fix the issues that Apple were facing, they chose to put Steve Jobs back at the helm. Since Steve took over in 1997, Apple started to move quickly towards