Apple Case Study

Please divide Apple’s history into periods and trace the changes in business models that took place over these periods. Apple history is explained in the case history from 1972 – 2006. Apples history is described below, reflecting on the changes In Business Model (how the company generated revenue). The Beginning years, 1976 – 1 985: Apple was founded In 1976 and they built a computer circuit board named the Apple l. Within p of 4 years they went to PIP with the help of Venture capitalist Markup, Jar. Its original business model was based on selling a computer that could e used straight out of the box with a closed platform.

In 1981 IBM introduced a Microsoft’s DOS operating system and it’s an open system and easily cloned, whilst a lack of compatible software on Macintosh (Mac) made net income fall 17%. Steve Jobs was removed from his operational role by the board. Jobs left Apple to find a new company NeXT. The sculls years, 1985-1993: In 1985 John Sculls was appointed as CEO. Sculls was an operations and marketing expert from Pepsi. Scull’s strategy was focused on taking Apple into the corporate world, which he did successfully, making Apple a well-known brand name.

During the Sculls years Apple was able to monopolize on the “love affair” for Macs by selling at a premium. In 1990 Sculls changed the business model to sell their computers at lower prices to get more market share, while also delivering new ‘hit products’ every 6-12 months. Apple embarked on a Joint venture with MOM to create a new operating model, multimedia applications, etc. Sculls also reduced headcount by 10% and moved much of the manufacturing to contractors. Sculls also made himself Technology officer despite having no skills In this area.

He was then relinquished of his duties In 1993. The spindled years, 1993 – 1995: Spindled was an engineer and had successfully headed Apple Europe and changed the business model once more to focus on education and publishing. He killed the plan to put the SO on Intel and instead he would license other companies to produce MAC clones. He focused on international growth I. E china. Spindlier business model also focused on the fact that the new operating model would save the company. Like Sculls, Spindled had to slash costs but Apple still had problems.

In first quarter of 1996, apple reported $69 million in losses and more layoffs and Spindled was replaced. Amelia years, 1996 – 19971 ND a high pricing / differentiation strategy and slash payroll. Amelia wanted to turn apple back to its premium price differentiation strategy. He cancelled the next generation Mac SO, which had already cost $mom in R&D. Instead apple would acquire Next along with Steve Jobs. Amelia brought NeXT and brought Jobs as an advisor. Apple still suffered financially and Amelia was forced out. Steve Jobs became the temporary CEO. 997- Steve Jobs era: Steve Jobs re-joined the company in 1996 after Apple acquired NeXT. He made several drastic changes; investment into Apple, a commitment to develop core reduces, ended the Mac licensing program while buying the assets of the leading clone maker, consolidated the product ranges, and launched the Apple website to sell products directly. Jobs’ business model turned the company around. He agreed that Microsoft would invest in core products for MAC ii office. Also he rationalized product range from 15 to 3, research projects by 70% and reduced staffing and outsourcing.

Comment on what you learn about business model and business model change from this case. When evaluating Apple’s business model, it’s useful to think in terms of the pre-1996 era and the post-1996 era. Apple has always been and continues to be a manufacturer of computers and electronics with a focus on complete hardware and software integration. Prior to 1996, the company focused almost exclusively on personal computers in the Macintosh line, with the occasional foray into innovative products like the Newton.

When Steve Jobs re-joined the company in 1996, that mission evolved beyond personal computing into products like the pod, phone, and pad. Apple is positioned well for the future, and it’s not a company that’s willing to settle for current success. Unafraid of centralization, the company continues to churn out Phones that make the pod look like a hobby, as well as the pad Mini that unashamedly steals market share from its big brother. Notoriously secret, the company reveals little about the product pipeline, but it’s believed that Steve Jobs has left a product roadman for more than a decade.

How do other theories of strategy such as capability theory fit with this story? Apple was unable to maintain any strategy over this period since every CEO inconsistently changed the business model and strategy of Apple. Apple’s most important resources and capabilities are Steve Jobs, and the integrated system of hardware and software hat the firm has developed and successfully marketed to derive value. Steve brought Apple back to tremendous success following a decline in relevance and heads the continued creation of billions of dollars of value.

While Apple’s designers, programmers, and engineers each represent key resources, the ability of the firm to exploit their abilities to create their entire software/hardware ecosystem is the firm’s Apple Stores – Retail Locations The introduction of Apple stores has provided the company with an important physical presence to act as both a sales location and an advertisement. Apple tops any retailers in in-store sales, generating $4,032 per retail square foot per year, beating other retailers like Tiffany & Co. At $2,666 and Best Buy at only $930.

Relationship with Moms Apple has outsourced all of its manufacturing processes to MEMO partners in China, like Foxing and Hon.. Ha Precision Industry while focusing on design internally. The relationships between Apple and their MEMO partners are very close to provide Apple with excellent service and high quality products. Industrial Design Capability Apple’s incredible industrial design capability is a function of their innovative design names, led by Jonathan Eve, senior vice president of industrial design, and the firm’s parameterization of design and outsourced production.

Talented Software Development Teams Apple’s software developers are carefully selected and talented programmers. They’ve produced industry award winning software and the highly regarded iterations of Macintosh SOX operating system. Tailored Hardware/Software Systems One of Apple’s most important capabilities is their ability to develop and build highly integrative systems with software designed specifically for the hardware it runs on.