Story of Apple
The story of Apple can be described in five separate phases, with each one facing its own strategic concerns and issues to grapple with. The first period of 1976-1984 entailed formation of the company (Abdelsamad et al., 2010). Apple was founded on April 1, 1976 in a garage in California by Steve Jobs and Steve Wozniak (Abdelsamad et al., 2010). Their friend, Mike Markkula, came on board to assist with marketing the firm and give the image of a million-dollar corporation. In the 1980s, all three founders left the Apple management team, only Markkula remained in the Board of Directors until August, 1997 (Abdelsamad et al., 2010). The initial reported success was mainly due to technological and marketing innovation, which helped the establishment develop breakthrough products that played an instrumental role in stimulating the growth of software applications for computers. Thus, it helped Apple to stay ahead of the competition. Moreover, this growth continued up to 1983 after the entry of International Business Machines (IBM) into the personal computers (PC) market, which offered low priced personal computers (Abdelsamad et al., 2010).
The second phase of Apple story lasted from 1985 to 1997, which was featured by failures of the managers to extend and expand the company. In 1985, following the slump in the market, the founders – Wozniak and Jobs – left the firm (Abdelsamad et al., 2010). At the position of the Board’s Chairman, Jobs hired John Sculley (an executive who previously worked for Pepsi) as his deputy in 1983 (Abdelsamad et al., 2010). Jobs intended to mentor Sculley; however, in 1985, a power struggle intensified between them. Jobs had a more entrepreneurial orientation and wanted Apple to engage in new directions that seemed risky. By contrast, Scully felt that the enterprise had grown enough to the point it had to be cautious in its strategic moves (Abdelsamad et al., 2010). The Board sided with Sculley because they felt that he was more experienced in leading the corporation to its next level. As a result, Jobs resigned and sold all shares except one (Abdelsamad et al., 2010). With Sculley becoming both the Chairman and the CEO, the company planned a significant turnaround. Sculley reorganized Apple with a keen emphasis on streamlining the operations as well as the expenses. Wozniak left at that time. A considerable growth in sales was recorded between 1986-1987 of about 40 percent from $ 1.9 billion to 2.7 billion (Abdelsamad et al., 2010). During the early 1990s, Apple was the paramount seller of personal computers. However, over the span of 1993-1995, there were drastic changes in the management following domination of Microsoft in the computer industry due to strategic partnership between Intel and Microsoft (Abdelsamad et al., 2010). In 1993, Sculley had to resign and Michael H Spindler assumed leadership (Abdelsamad et al., 2010). In the course of this period, there were numerous acquisition offers although many executives preferred merger of Apple with another venture. With no incorporation looming, the majority of executives resigned. Spindler resigned and Gilbert Amelio became the CEO of Apple. During his tenure, the firm lost a considerable portion of its market share, earnings and the stock value declined considerable. The market was dominated by Microsoft then. Apple acquired NeXT in a bid to regain its footing in the personal computer market, which led to return of Jobs as the CEO since it was the part of the purchase agreement (Abdelsamad et al., 2010).
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The next important phase in the growth of Apple passed between 1998 and 2001, during which Jobs stopped the majority of existing projects that were undertaken by the corporation such as the iBook. Apple shops were reopened, the iPod was introduced and the iTunes music store was launched. The 2002-2006 period is another important stage of Apple’s history, which was distinguished by corporate resurgence (Abdelsamad et al., 2010). The company re-launched the iMac in design but did not perform in the market as expected. More stores appeared in Canada, Europe, UK, and Japan, resulting in about 167 retail outlets globally. At this time, iPod emerged as the leader in a novel industry pioneered by Apple (Abdelsamad et al., 2010). From 2007 onwards, the enterprise has focused more on mobile consumer electronics. The name Apple Computer Inc. was changed to Apple Inc. because the firm diversified from computers. Some of the innovative products launched during this era include the iPhone, App Store, the iPad, and Apple TV among others (Abdelsamad et al., 2010).
Steve Jobs’ Entrepreneurial Characteristics
Steve Jobs had a number of entrepreneurial characteristics that played an important role in ensuring the initial success of the corporation as well its corporate resurgence after he returned to Apple. The first entrepreneurial trait exhibited by Jobs is optimism and self-confidence (Abdelsamad et al., 2010). In this respect, Jobs was able to see the potential that Pixar had. In fact, prosperity of Pixar has been attributed to relentless drive of Jobs, which was crucial in transforming the company to become one of the best studios today. Jobs found Pixar when it was underperforming but managed to reform and advance it. During Jobs’ tenure as the CEO and Chairman of Pixar, the animation film studio created 3 of the 6 highest grossing animated movies of all times, which included Toy Story, A Bug’s Life, and Toy Story 2 (Abdelsamad et al., 2010). Some analysts state that Jobs and Michael Eisner – Walt Disney’s CEO – had a rocky relationship since both of them were overconfident.
The second entrepreneurial quality of Jobs was the ability to take calculated risks. When the popularity of personal computers was soaring and more standardized computers were being developed because of their user-friendliness associated with the Windows Operating Systems, Jobs envisioned a chance to innovate (L?sted, 2012). At the time, designs and ideas of Apple were relatively less widespread initially when compared to those of Microsoft as evidenced by their market share. Jobs’ approach was to continually tweak product coupled with the addition of attractive designs and extra elements, which gradually started gaining attention. The outcome was that Apple emerged as a leader in the operating systems market (Abdelsamad et al., 2010). Hence, the firm was not opting to conform to the trends that dominated the market. Furthermore, it can be noted that Jobs differed from Sculley owing to the fact that the former was more oriented towards venturing while Sculley wanted to play it safe.
The third entrepreneurial feature peculiar by Jobs is the ability to respond to challenges positively. During the first quarter of 1997, Apple reported the loss of about $ 708 million. With an immense obstacle ahead, Jobs had to devise solutions to help ensure that Apple remained afloat (L?sted, 2012). He reached a deal with Microsoft in order to secure survival of the company, which encouraged Microsoft to invest $ 150 million to acquire a non-voting minority stake. The fact that Jobs assumed leadership of a firm that was facing decline is an indicator that he was ready to respond to the challenge. Consequently, Apple would later regain profitability quicker than anticipated.
Flexibility is also another important entrepreneurial trait exhibited by Jobs. Immediately after he was dismissed from his own establishment, Jobs moved on and founded NeXT, which was subsequently acquired by Apple. Moreover, Steve Jobs’ ability to adapt is evident in his vision of the enterprise (L?sted, 2012). For instance, after realizing that the corporation could no longer be sustainable selling computers alone, he induced it to develop other goods. Over the course of his leadership at Apple, the latter has expanded the scope of its manufacturing portfolio in a bid to adapt to changes in the external environment (L?sted, 2012). In this respect, Jobs strategically managed leading Apple through the period of novel product launch, heightened competition, and technology that is rapidly changing, which require flexibility to be able to successfully run a company through turbulent times (L?sted, 2012).
Another important entrepreneurial attribute of Jobs’ is knowledge of markets. While launching the various Apple products, Jobs seldom talked about their features. He rarely mentioned such characteristics as resolution of the screen or speed of the processor (L?sted, 2012). He knew that most people were not concerned about these aspects, and those who were considerate of the latter could easily access that information on the official website. Rather, he emphasized significantly how the product would affect experience of the user. He once stated that he found it irritating to carry an MP3 player and a phone, and with the iPhone, both were condensed into a single device that could be easily carried around (L?sted, 2012). Jobs concentrated on simplicity, style, and efficiency in which people evinced considerable interest. With this vast knowledge of the market, Apple was able to elaborate innovative items that had a profound impact on the lives of people (Abdelsamad et al., 2010). In addition, Jobs had an aggressive and demanding personality, which is one of the important attributes that eminent entrepreneurs have.
Apple’s Strategic Strategies and Operational/Competitive Strategies
The strategic and operational tactics adopted by Apple have been instrumental in ensuring the success of the company. The first aspect of Apple’s business strategy is the focus on delivering the best user experience. Thus, this is the first right thing that Apple did, and has been the guiding principle for the firm since its establishment. Besides, this was achieved by leveraging innovation to offer customers novel products and solutions characterized by superior design, seamless integration, and ease of usage (Abdelsamad et al., 2010). In order to realize this strategy right, Apple believes that continuous investment in research and development is crucial for creating and enhancing breakthrough technologies. The product development strategy adopted by the corporation reflects constant improvement of existing goods to incorporate new features and broaden practical knowledge of purchasers. As a part of increasing experience of their customers, Apple also expanded its distribution as means of effective enticement of more clients and providing them with high quality sales as well as after-sales support (Abdelsamad et al., 2010; L?sted, 2012). Overall, the management did the right thing by hinging its business strategy on buyers’ experience since its foundation, and this was achieved through continuous enhancement of existing manufactured articles, promoting new innovative items, and expanding distribution to attract more purchasers.
The second aspect of Apple’s business strategy is differentiation (L?sted, 2012). Hence, this strategy was devised since the early days of the company wherein the latter focused on designing key product qualities to differentiate itself from the competitors (L?sted, 2012). For instance, Apple developed an integrated computer system that accompanied an operating system installed. Moreover, this was different from the prevailing trend in the market that was characterized by buying computer parts from various vendors and then installing the operating system of another retailor (Abdelsamad et al., 2010). Apple viewed such an approach to building computers as locking out the average use; thus, they chose to devise an integrated computer system that is easy to operate. It is evident that Apple goods are unique and distinctive, which can be attributed to the elegant design coupled with user friendliness as well as high-end branding, which have successfully differentiated the firm from its rivals (L?sted, 2012). The underlying feature of this strategy is that Apple tries to ensure that it is discerned from its opponents not just in terms of price, but also other core properties that are useful to customers. The design of Apple items is such that it can be apply to anyone, that has helped the company reach a wider market segment in turn (Abdelsamad et al., 2010). Again, in order to ensure clear distinction, Apple has to continually innovate by means of research and enhancement. Since rival organizations often pursue novel products and design, Apple is compelled to keep upgrading to ensure that it is ahead of competition. Therefore, Apple gives prominence to differentiation right through emphasizing continuous innovation, which constitutes an important aspect of their strategic objectives (Abdelsamad et al., 2010).
Furthermore, product development is another important aspect of Apple’s effective strategy. The latter is a key pillar of the corporation’s growth strategy (Abdelsamad et al., 2010). Hence, this is implemented by offering attractive items in order to increase performance and market share. Yet again, Apple relies on continuous innovation through research and advancement to employ this tactics. Unconventionality is a critical success factor for Apple. For instance, some of its wares like the iPhone and the iPad are constantly updated. Additionally, Apple product development is characterized by elaborating novel items for new markets (Abdelsamad et al., 2010). A classic instance is implementation of the iPod, which created a completely new industry segment. The same approach has been adopted to the Apple Watch, which has induced a completely new section of smart watches. Therefore, by means of product development, Apple becomes the market leader of exploring pioneering technologies.
What Should Tim Cook Extrapolate, and Why?
In 2011, Steve Jobs took a medical leave because of his deteriorating health condition; nevertheless, he was still the CEO of the company and was responsible for making strategic decisions. As a result, Tim Cook was appointed as the Chief Operating Officer and tasked with overseeing daily operations of the firm (Abdelsamad et al., 2010). Cook fulfilled his duties exceptionally well during the time when Steve Jobs was absent and even received an award for his superb performance. Cook has worked there since 1998 and occupied various positions in other organizations (Abdelsamad et al., 2010). Therefore, it can be concluded that he is the perfect person to continue implementing the legacy of Steve Jobs. To this end, Cook has the responsibility of promoting the values that his predecessor established putting an emphasis on constant innovation. Cook should make use of his experience at Apple to steer the company in the right direction without undermining the principles instilled by Jobs. Whereas it would be challenging to fit into the shoes of Jobs, Cook has proven to be capable of leading the firm to greater growth in order to surpass the level achieved by Jobs; however, this demands Cook to extrapolate values that are consistent with the philosophy that has guided the venture over the years.
The important aspect for Tim Cook to extrapolate is that he should act as the face of the company just as Jobs did. During tenure of the latter, it was difficult to differentiate Jobs from Apple and vice versa. Tim Cook should try to accomplish the same. One way to attain this goal is to make big announcements as Jobs did. Thus, this requires Cook to make product announcements rather than delegate it. According to L?sted (2012), product launch announcements and launches are the ideal setting for the leader to show how they are excited about the manufactured item and root for it. Therefore, this is not a task that should be assigned to senior Vice Presidents, but he should perform them by himself to show the public that he is passionate and informed about the developed goods and how they fit within the story of Apple as well as his vision of the corporation. Jobs managed to be the face of the company by making a case for Apple’s manufactured articles through describing flaws and limitations of existing items, and outlining how Apple intended to solve the problem (L?sted, 2012). He always portrayed Apple as the hero that expressed concern for clients. The outcome is that Apple customers could relate to him since he demonstrated empathy for their problems (L?sted, 2012). Tim Cook needs to adopt a similar approach by showing consumers that he knows and uses the manufactured products.
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John Tarpey’s Concerns
John Tarpey was anxious about how Apple would manage to report an outstanding performance despite the economic turmoil. A more important concern related to how Apple could continue maintaining the high level of operation and constant innovations (Abdelsamad et al., 2010). Tarpey analyzed the income statements and balance sheets of the company in an attempt to make a recommendation for his clients on whether or not to invest in Apple (Abdelsamad et al., 2010). He was uncertain about the decision because of a number of concerns regarding the future of the corporation. For instance, he was not sure about the extent to which the success relied on Steve Jobs given his deteriorating health condition. He was not confident as to whether the succession plan initiated by the executive was an indication that the present shareholders were not convinced in the Jobs’ ability to continue holding his leadership. In addition, he had concerns about the time, which Apple rivals needed to overtake Apple in terms of product development. In general, his main unrest was the future of the company without Jobs in the picture (Abdelsamad et al., 2010).
However, there is no doubt that the prospects of Apple do not include Jobs. Numerous other firms sustained their advancement even after the founders left or died. An important aspect is to ensure that values espoused by the originators are deeply instilled into the organization, which is something that Jobs achieved. Hence, this is evident by the culture of continued innovation even with Tim Cook as the CEO. New manufactured items have been introduced. Apple reported groundbreaking sales of iPhones and the stock prices have hit new highs. Therefore, it is recommended that Tarpey should encourage his clients to hold their present stocks because the future of Apple is certain.