From Pepsi to Apple

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CAVENDISH UNIVERSITY UGANDA

Course: MBA –Marketing

Student/Author:Opio Emmanuel Len O.

Student Contact:opiolen@yahoo.com

Lecturer:Samuel Mayanja

Module: Strategic Management

Assignment Brief: From Pepsi to Apple is a course work assignment presented

Abstract

This essay analyses the strategies that enabled Apple Inc. to develop from a small company operating in Steve Jobs’ garage to one of the world’s most successful and most recognizable companies. The essay briefly introduces and defines the concepts of strategy and strategic management. It then delves the history of Apple. An attempt is made to analyze the key strategies that propelled Apple to such success while critiquing limitations of such strategies where applicable.

Introduction

Johnson and Scholes in their book Exploring Corporate Strategy define Strategy as “the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations". In other words, strategy is about:

• Where is the business trying to get to in the long-term (direction)

• The markets a business should compete in and the kinds of activities are involved in such markets (markets; scope)

• How can the business+s perform better than the competition in those markets? (advantage)

• What resources (skills, assets, finance, relationships, technical competence, and facilities) are required in order to be able to compete? (resources)

• What external, environmental factors affect the businesses' ability to compete? (environment)

• What are the values and expectations of those who have power in and around the business? (stakeholders)

Strategic management in the broadest sense is about taking "strategic decisions" to answer the questions raised above. In practice a thorough strategic management process has three main components; strategic analysis, strategic choice and strategy implementation:

HISTORY OF APPLE

Steve Jobs and Stephen Wozniak founded Apple Inc. (Apple) on April 1, 1976, in Jobs’ garage. The two partners had been introduced to each other in 1971 by a common friend, Bill Fernandez. As a hobby, Wozniak manufactured microcomputers that were cheaper than other existing microcomputers. Wozniak had built his own computer board — simply because he wanted a personal computer for himself. Steve Jobs took interest, and he quickly understood that his friend's brilliant invention could be sold to software hobbyists, who wanted to write software without the hassle of assembling a computer kit. Jobs convinced Wozniak to start a company for that purpose: Apple Computer was born on April 1, 1976.

Apple took off in Jobs’ garage. However, Wozniak had started work on a much better computer, the Apple II. — an expandable, much more powerful system that supported color graphics. Because they knew it would be successful, Jobs convinced former Intel executive turned business angel Michael Markkula to invest $250,000 in Apple, in January 1977. Markkula was a big believer in the personal computing revolution, and he said to the young founders that, thanks to the Apple II, their company could be one of the Fortune 500 in less than two years.

Apple's soon became an American success story which made Apple founders millionaires. The biggest surge in sales came after the introduction of VisiCalc, the first commercially successful spreadsheet program: hundreds of thousands of Americans, whether they be accountants, small business owners, or just obsessed with money, bought Apple IIs to make calculations at home.

In the wake of Apple's success, its investors decided it was time to go public. The IPO took place in December 1980, only four years after the company was started. Steve Jobs's net worth increased to over $200 million, at age 25.

Apple's success...
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