APPLE COMPUTERS, INC.
September 1, 1995
OL 421 STRATEGIC MANAGEMENT AND POLICY
In 1976, Steven Wozniak and Stephen Jobs designed computer boards in a garage. During the next six years, this operation was transformed into a Multi-million dollar company called Apple Computer. It broke into the Fortune 500 in 1982. While Apple has experienced tremendous growth, it has recently begun to experience problems, which, if unabated could have a significant negative impact. This includes a weak organizational structure, a rapidly changing external environment, lack of strategic ...view middle of the document...
7/1, a quick ratio of 2.8/1, a long term debt ratio of .012 and a total debt to asset ratio of .32. Should sufficient capital not be available internally, debt financing to support a wide variety of strategic options is a viable option.
MANAGEMENT: While the overall financial situation and the quality of the workforce are excellent, a factor that limits the adoption of strategic options is Apple’s weak organization structure. An “insider” called it chaos. A general lack of leadership is evidenced by the fact that in a rapidly changing external environment, the company seems to have no viable vision of strategy. It seems to be caught up in an unfocused product development web. It is neither market nor technology-driven. This will reduce Apple’s ability to compete and respond in a timely manner. In view of the above, Markulla’s probable departure can be viewed as timely. While he has served the company well during its formative years, it now urgently needs a CEO, who can provide the strategic leadership for Apple to succeed in an increasingly competitive environment.
RESEARCH AND DEVELOPMENT: While Apple is blessed with creative employees, the environment in which they work can also be described as chaotic and lacking in focus. This situation is compounded by design and operating problems in the Apple III, which have resulted in low consumer confidence in the product. Further, fifty million dollars has been spent on the development of the LISA. But Apple does not as yet have a clear plan to introduce and market it and the MacIntosh. These products were developed by creative employees without a clear vision as to what was needed in the marketplace. The increasing competitive nature of the industry strongly suggests that the this type of corporate drift will place the company at a competitive disadvantage as its competitors strive to meet specific consumer and client needs.
MARKETING: The single channel of distribution, the Apple franchise, has created problems, to include a lawsuit, which must be dealt with if Apple is going to compete successfully with IBM and the “clones,” and the impending threat of emerging competition from Japan. Apple is faced with the decision of how to reach the customer most effectively. This includes a consideration of the use of independent specialty chains, mass merchandisers, and/or a manufacturer’s sales force. Apple’s ineffective marketing strategies and its trailing edge, product-development-oriented philosophy are inconsistent with the nature of in the increasingly unpredictable high tech arena.
Apple also has remained dependent on outside vendors for software. Apple, like Wang and Digital, is not compatible with IBM. Increasingly, however, the successful marketing of the hardware is dependent on the availability of software for the end user.
In summary, the company is financially in an excellent position. Management, Marketing, and production problems seriously inhibit the...