Apple Inc. history and important information we came up with from the case that allowed us to successfully determine the “3 C’s and 4 P’s” and potential improvements: April fool’s Day of 1976 would mark the start date of the very powerful Apple Inc. Steve Jobs and Steve Wozniak, two college dropouts, began creating a computer circuit board in a garage. The main goal was to bring an easy-to-use computer to the market. By 1978, the product Apple II was released, and Apple Inc. became a powerful market leader. Unfortunately, as a response to the IBM PC, Apple introduced the Macintosh in 1984, which proved to be harmful to the company.
Although it made a breakthrough in the technical design, ease-of-use, and technical elegance, it’s processing speed and lack of compatible software limited sales, lowering income by 62%, and eventually pushing Jobs out of Apple. The new leader of Apple Inc. was Sculley, whom was recruited over from Pepsi-Cola for his great marketing skills. Sculley allowed Apple to recover and gain 8% of the market share, as well as becoming the most profitable in the industry. Sculley pushed Apple into many markets, and soon, they gained customer loyalty and were able to sell at premium prices.
A less expensive Mac Classic was also produced for mass-market appeal. In 1993, Spindler replaced Sculley. Spindler’s plan was to seriously reduce company costs and grow internationally. Soon, Apple paired up with two new companies, but when Taligent and Kaleida decided they did not want to switch to a new technology, costs and losses occurred, and the company appointed another CEO, Amelio. Amelio’s term as CEO did nothing for Apple Inc. Apple would not turn around until 1997, when Steve Jobs was reintroduced to Apple as CEO. Steve Jobs quickly allowed Apple Inc. to become successful again.
Microsoft invested 150 million into Apple to get Microsoft applications to work on Apple Inc. ’s computers. Apple limited itself to four categories: desktop and portable macs, for consumers and professionals. The new focus was innovation, and Apple Inc. cut costs and inventory, and focused on spending more on R&D (research and development). In 1998, the iMac was introduced. This featured “plug and play” (such as allowing printers). The iMac proved to be extremely profitable and successful for Apple Inc. Jobs also fixed the company’s image through marketing techniques.
He was able to market the mac as being energy efficient and a hip alternative to other computer brands. Historically, Apple has had competitive advantages due to their design and perception of the products it produces. Apple Inc. ’s operations are very innovation-oriented, technology driven and independent. Apple emerged with products that were easy-to-use, technologically superior, and constantly innovated. The focus on innovation allowed Apple to command a premium in the market, leverage its expertise, and be superior and above average.
Also, unlike Microsoft, Apple practices horizontal and vertical integration in its outbound logistics. This is a huge competitive advantage for Apple Inc. This basically means that Apple relied on its own designs and they refused to license their software to third parties. When it comes to marketing, Jobs reintroduction to the company as CEO allowed the brand perception to turn around. They used the slogan, “Think Different,” “The ultimate all-in-one design,” and many more. The use of plug and play could also be seen as a competitive advantage.
When it comes to Apple’s services, they offer very secure systems that are less prone to catching viruses, unlike Microsoft computers. By the early 1990’s, Wintel (Windows OS with Intel processor) set the standard and took over the industry. Many manufacturers needed to build their PCs around these standards. The industry continued to expand, but volume growth exceeded revenue growth, and average selling prices continued to drop each year. This led to PC manufacturing companies to decrease their spending, which decreased research, development, and innovation.
Dell, the industry leader, was only spending 1 percent of its revenues on R&D, which clearly impacted the rate of development. Details of the personal computer industry: •New products introduced: netbook, light-weight notebooks, laptops, etc. •Buyer categories: Home, small and medium sized business, corporate, education and government. •Major manufacturers: Hewlett-Packard, Dell, Acer, and Lenovo. •Suppliers: Those who made the products with many sources (available at highly competitive prices), and those that made products with few sources like microprocessors and operating systems (Intel and Microsoft).
Originally, Apple Inc. ’s sustainability was questionable. Profits and market shares started high, then decreased, and then again rose after Jobs became part of Apple again. Apple Inc. was constantly changing its strategies while Sculley, Amelio and Spindler were Apple’s CEOs. This caused the company to not be very sustainable at the time. Also, Apple was technically a niche. Their products were mostly high end, different, and expensive. In my opinion, this actually lessened Apple Inc. ’s sustainability in the PC market.
Although Apple was not very sustainable in the market at first, it would soon turn around when Jobs became CEO. He dramatically increased sustainability through the agreement with Microsoft, launching the iMac which was a huge success, outsourcing and expanding to national chains, opening the Apple store (which was selling directly- this was great for brand awareness and brand image/perception as well), the new marketing techniques that included new slogans and a “hip” image, and the introduction of the MacBook, MacBook Pro and MacBook Air.
Jobs also was able to further innovation. These innovations include the following: operating with windows and Mac apps, the Leopard OS, Safari (a web browser that I believe is much better than Firefox and IE), MS-Office, iTunes, an incredibly large variety and span of great Apple applications, and more. All of these factors allowed profits to increase, as well as Apple’s market share. These factors, along with Jobs continual innovations, have allowed Apple Inc. to become very sustainable in the PC industry.