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Case Study Apple Inc

4998 words - 20 pages


Submitted by:

F 12:00-3:00

Submitted to:

Mr. Rene Y. Paquibot

1. Summary

Everything started on April 1, 1976, when Steve Jobs, 20, and Steve Wozniak, 25, both electronic experts, decided to create and sell personal computers designed by the latter. Their little company was located in Job’s garage. They called their company Apple and their first machine, Apple I. It was just a simple computer with no case, keyboard and power supply. However, in October 1976, through the efforts of Woz, an improved version ...view middle of the document...

With all Jobs’ demands, Apple started to change for the worse. Significant employees started to clash with executives. Jobs even tried to ask John Sculley, former marketing vice president of Pepsi to join Apple as CEO. On the other hand the Lisa line had its own problems. In 1984, the Macintosh was introduced in the market which had early strong sales but then lacked some important features such as a hard disk drive and insufficient computer memory which were present in other machines. Such absence caused Apple to incur its first loss in 1985.

Due to drastic actions that happened in Apple, Jobs had no other choice but to resign from Apple. He then created another computer company he called NeXT. Together with his resignation, Sculley closed the Lisa line which generated minimal sales due to its high selling price. In January 1986, an improved version of Macintosh, called the Mac Plus, was introduced.
Apple had its golden years for the period between 1986 and 1991 because it was able to offer both hardware and software to customers to “plug and play”. In 1990, the sales of Apple were around $5.6 billion, representing 8% of the global market share. Apple even had a strong statement of financial position and was regarded as one of the top income generating companies worldwide.

This period raised concerns on whether MAC operating systems should be cloned. Sculley was in favor of cloning such systems. However, Jean-Louise Gassee, head of Research and Development at Apple, disagreed. However, in 1985, the company pursued licensing its Mac clones to Microsoft which were later on called Windows, which looked like a typical Mac operating system.

Around the 1990s, Microsoft introduced Windows 3.1 has been introduced which caused Apple’s unique display of an operating system to disappear. It even turned the company into a niche player. Dan Eliers, the vice president of strategic planning said that “The company was on a glide path to history.” On the same period, it was found out that Apple was spending 8% of its sales on Research and Development costs which was significantly higher than its rivals. Sculley decided to respond to the situation through different possible situations. He appointed himself as CEO of the company despite his marketing background. Next, he brought out low-cost versions of the Mac to compete with competitors such as IBM. It produced Mac Classic, which was introduced in October 1990. He cut the prices of the other produces by 30%. He also reduced the workforce by 10% and the salaries of top management, including his, by 15%. He also attempted to have a technological lead through introducing new products, such as the Powerbook notebook, which are introduced every 6 to 12 months. Last, he made Apple enter into a contract with IBM, which lost its share of the PC market to companies like Intel, Microsoft and Compaq. Sad to say, despite Sculley’s best efforts to regain a competitive advantage, low...

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