Apple Case
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Steve Jobs was a visionary who was able to steer the company in the desired direction right from its inception. His first vision was to bring an easy to use computer to market. The Apple I & II PCs sparked a computing revolution which resulted in $1 Billion annual sales in less than three years. Although the entry of IBM in 1981 changed the competitive position of Apple, IBM was an “open” system that other producers could clone. Apple proprietary systems helped contradict IBMs disadvantage and ensure revenue growth for Apple despite the sharp drop in market share to 6.2%.In 1984, Apple introduced Macintosh which was a major breakthrough. When the net income fell to 17% in 1983-84, Steve was replaced by Sculley as CEO. Sculley worked aggressively from 1985 to 1993 to conquer the desktop publishing as well as education arenas which proved to be highly successful. To capture the low price market, Apple introduced Mac Classic in 1990 which competed with the low priced IBM clones. In view of the above details, Apple proved to perform generally successful till 1991.
Between 1992-1997, Apple had undergone through a series of rough patches and bad decisions which impacted the company negatively. Taligent, the alliance of Apple with IBM to create a revolutionary OS resulted eventually in a combined loss of $500 M. Although Sculley tried hard at cost cutting, Apples gross margin dropped by 14 points to 34% which was below the companys 10 year average. Soon Spindler replaced Sculley and the new CEO gave license to a handful of companies to make Mac clones for which they would give royalty of $50 per copy. The incompatibility of Mac with Microsoft Windows was dearly affecting Apple. The first fiscal quarter of 1996 resulted in a $ 69 million loss for Apple which gave way for Amelio replacing Spindler as the new CEO. But Amelio could not steer the Apple in a prosperous direction despite his austerity moves. Apple ended up losing $1.6 Billion and market share drop from 6% to 3%. This ended the quick rotation of CEOs with Steve Jobs back at the helm of Apple as CEO.
Steve Jobs revived the fortunes of Apple with his characteristic hunger for innovation. He brought about Microsofts investment of $150 Million in Apple. Jobs revoked the Mac production license to clones which had brought about rampant cannibalization. In 1997 Apple started selling directly through its website. The launch of iMac in 1998 had a significant impact for Apple. Steve revived the R&D expenditures and pared down the inventory significantly. Steve worked tenaciously in creating the image that Apple was not just a technology company but rather a cultural force. Then the introduction of the Apple range of laptops in 2008 ranging from Mac Mini, MacBook, MacBook Pro to the ultra thin MacBook Air brought back the premium-price differentiation strategy of Apple. The Unique Selling Points (USPs) of Apple were the attractive apple design factors, ease of use, security and high-quality bundled software. Steve also brought about the long overdue movement of Apple from PowerPC chips to Intel Core Duo Chips which drastically increased the performance of Apple products and could finally be compatible with Microsoft Window. Also the Mac OS X called Leopard turned to be most successful OS X release ever. Apple also worked on developing applications such as the iLife suite (iPhoto, iTunes, iWeb). Apples own distribution channels as well partnering with Best Buy catapulted the sales of Apple products across the world. With the further introduction of iPod, iPhone and iTunes, Steve Jobs had clearly put the company back on the path to prosperity after resuming leadership of Apple.
Apple launched the iPod in 2001 which was heralded as “an icon of the digital age”. The product was clearly successful even with