Apple's Business Strategy

Sabbir Hasan
Date: April 11, 2008

Article#2

The article that I reviewed was titled “Saving Apple from the Brink of Death with Business Strategy”. We all know that Apple begins its journey since 1976 by Apple I. The Apple I's initial cost was only $666.66 in 1976. Since 1976 Apple is trying to improve their products and represents their innovation each and every year. They are also holding their promise and always trying to give their best by their new innovations. Today’s Apple is having a lot of product lines like Mac Book, I phone, I Mac pro, I Mac Mini, I pod even Apple tv. The man behind this success is Steve Paul. Steve Paul Jobs is considered to be the most important person in Apple’s history and present. Not only has he founded Apple Computers, but also he has saved it from the brink of death when he returned as CEO in 1997. Steve Jobs was re-hired to save Apple from its bele agurement when the past three CEO's could not bring Apple to its glory days again. After Jobs returned to Apple, he currently (up to 1Q 2002) managed to remain profitable in seventeen out of the eighteen financial quarters. Even though Jobs was the founder of Apple Computers, he resigned from Apple Computers in 1985 to form NextStep Computers after losing control of Apple. Basically today’s Apple is surviving in this world for some key business strategy which is developed by Steve Paul.

Before Steve Paul, John Sculley had full reign of Apple from 1985-1993. But during his period lost the competitive advantage Apple had as a first mover and product features. He could not maintain Apple’s competitive edge and lost market share during the last few years he controlled Apple (Rebello, 1996). Scully had trouble continuing Apple’s successes and growth in the market place.
Apple had committed several mistakes in its strategies, especially in supply chain management. Most of the losses were due the CEO’s previous lack of understanding in the computer market (Rebello, 1996). Apple needed to reposition itself strategically and quickly. The ultimate mission statement of apple is to earn the market share and try to innovate the hardware, software and internet offerings.
When Steve reappointed as a CEO of apple first he was trying to research how to get the market share by innovating new products. After that he came up with some new ideas. They are:
1. Life style strategy
2. Internet strategy
3. Mass Customization
4. Creating value and adding value
5. Attaining and sustaining competitive advantage

These are some major strategies which are responsible for the success of Apple.

1. Life style strategy: The digital lifestyle era is Apple’s vision for the next era of personal computers. And for that reason apple was trying to innovate MP3 players, DVD players, CD players, digital cameras, PDAs, DV camcorders, and other gadgets to a central computer since 2002. Apple was trying that their computers will be in the middle of it all which can interoperate and support external devices. That means the users can edit videos, transfer mp3s, burn and mix CD’s etc.

Then apple innovate and developed a music strategy to help make the Mac the users’ digital hub. Apple developed iTunes which allows users to rip, mix, and burn CDs from the comfort and ease of their computer. Along with burning CDs, users are able to use iTunes to sync their music files with MP3 players such as iPod. Not only this now can people buy songs from I tunes. Recently apple introduced all the American idol songs in their I tunes. There are personalizing their strategy in terms of the customer’s interest by knowledge management.


2. Internet strategy: In this strategy apple was trying to sell the songs by internet by using I tunes. They are trying to change the customer’s attitude by developing I tune software. Not only had that to protect our kids from the adult sites apple developed KIDSAFE. Now with the blessings of kidsafe parents have the ability to disable Internet mail, chat sites, and games. This program was costly to maintain with little benefits given in return. In this strategy Apple uses profiling approach to serve some certain group of people.

3. Mass Customization: Before the introduction of the iMac in 1998, Apple was selling up to 12 different models of Macintosh computers in 1997. But many types and models of computer always confused the customers to buy the products. Now they are trying to develop a simpler product chart was needed for mass customization of their products. So they divide their product categories into four separate product lines so that they can mass customize their products according to the needs of the customers.

4. Creating value and adding value: One of the biggest reasons why people avoid purchasing Macs is the belief in the lack of software available for the Mac. This was especially true around 1996-1997 when Apple was rapidly losing market share. Now apple is trying to add some values along with their products like free software, I tunes, I movies ,Apple works etc. So if the customer buys a computer then they can enjoy these things for free. Now a days Apple is promising that all sort of Apple products will be free from any sort of virus. In I phone apple is giving free software which can work as a GPS navigator.

5. Attaining and sustaining competitive advantage: When Apple found that the design of original I Mac was 4 years old and for this reason the sales is decreasing. Again they found that the original iMac had personality and style unmatched by any Windows PC manufacturers. Apple learned from their competitors that it is the time for LCD. This practice happened by learning from others in knowledge management. And now they came up with their new Mac with LCD display.

Steve Jobs has done an amazing job at revitalizing Apple Computers. He took over Apple when it was at the brink of death, and brought back with much life. Today Apple came up with the world’s slimmest computer which is the perfect innovation of Apple in the perfect time. All of these things are happening with the blessings of Knowledge Management.


Work Cited
Knowledge,Wharton. “Is Apple's phone Rollout Smart Business?” http://www.forbes.com/entrepreneurs/2007/06/14/apple-iphone-microsoft-ent-sales-cx_kw_0614whartonmarketing.html
Stephen H, Wildstorm.Finally, a No-Hassle, No-Strain Computer
http://www.businessweek.com/magazine/content/02_06/b3769025.htm
“Saving Apple from the Brink of Death with Business Strategy” http://web.syr.edu/~bwlee/projects/ist755/saving_apple.html#_ftn5