In the early months of 2008, Apple Inc.'s revenues and stock prices soared high due to the high demand and sale of its newly launched iPhone mobile phones. This case study looks at the history of the company, which was formerly known as Apple Computer. In order to foresee what the future holds for the company in terms of sustainability, a study of the past would be helpful.
David B. Yoffie and Michael Slind
Harvard Business Review (708480-PDF-ENG)
February 29, 2008
Case questions answered:
- Case Synopsis for Apple Inc., 2008.
- Was Apple’s recent success just another temporary “up” in the entire up-down history? What are your recommendations and conclusions? Has the company finally established a sustainable strategy?
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Case answers for Apple Inc., 2008
Case Synopsis – Apple Inc., 2008
Apple Inc. was founded on April Fool’s Day in 1976, in a garage in Los Altos, California. Throughout the entire journey, during the ups and the downs, the company’s primary focus has been delivering the best experience and product to its customers.
Let’s take a look at the timeline of things that happened to understand the journey of Apple.
1. 1970s – The Start of an Era
- Apple Inc. was founded, and the first Apple I machine was developed to give ease of use to existing computer users compared with the existing DOS systems. This resulted in a USD 1 Billion in sales in less than three years.
- Vendor specialization of the Mac Line – To maintain customer satisfaction and experience, the company never allowed third parties to develop or make clones of their computer systems.
2. 1980s – The Beginning
- IPO of Apple Inc. – and in the next couple of years, the company became the Industry Leader.
- BM, a major competitor, entered the computing market and challenged the company resulting in a major change in Apple’s competitive position.
- With tough competition from IBM, the company’s Market Share dropped to 6.2%, and net income fell by 17% as the company could be clearly seen to go into crises.
- Steve Jobs was also removed from the organization, and John Sculley, was made the new CEO (was hired from Pepsi and Cola for his excellent marketing skills)
3. 1990s – The Change of Hands
- The major focus during this time period was on low-cost production, and also to shorten the Product Development Cycle.
- To achieve the above goals, Apple Inc. under John Sculley, entered into an alliance with IBM by forming a Joint Venture (Taligent) – with the sole aim of creating an exception and revolutionary Operating System (OS)
- However, Gross Margin continued to drop to