Harvard Case Study on Apple

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Apple Computer, 2006 Case
Apple was started on April 1, 1976 by Steve Jobs and Steve Wozniak. It humble beginnings led to one of the largest and most successful corporations in history. Today, Apple is a powerhouse of computer technology, putting out some of the most innovative products in the last 15 years. Things weren’t always great for Apple and the company has gone through its share of lows; in 1997, Apple’s stock was a mere $7 a share. Apple has finally found a sustainable strategy and, I believe has laid the foundation to sustain itself for many years to come.

In the beginning, Apple’s strongest competitive advantages were its ability to be the easy to use home computer. They also focused on being much geared towards being highly proficient in graphics and sound, something that IBM PC’s with MS DOS were not. When the Macintosh was introduced in the early 80s, it was a modern breakthrough in the ease of use, industrial design, and technical elegance. However, its slow performance and lack of compatible software limited its sales. Net income fell 17%, and Steve Jobs was removed as CEO. John Sculley came in after turned things around for a while.

From 1985 till 1993, Sculley’s aim was to exploit Apple’s capabilities in graphics and design to make the company a leader in desktop publishing as well as education. He also moved Apple into the corporate world with its superior software. Sales exploded and by 1990 Apple controlled 8% or the worldwide market share and 50% of the education market. Macs were sold as prestige products and the top of the line models went for as much as $10,000. Apple’s cost structure was also high, they devoted 9% of sales to R&D. Starting in 1990, Apple released mainstream products at low prices. He aimed to put out a hit product once every 6 to 12 months.

During this time, Apple also formed alliances with its biggest competitor, Intel. The many joint ventures included creating new system operation software and multimedia...
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