For what we know today as Apple Inc. started as a partnership between college dropouts Steve Jobs and his colleague Steve Wozniak in 1976. The two were working at Job’s family Garage before they brought in a third party Mike Markkula Jr, who was an instrumental partner in attracting venture capital. In the year 1976 Apple made its first product the Apple I which was a computer circuit board. In 1978 Apple released its second product the Apple II, an easy to use computer which revolutionized the PC industry. In less than three years the company had made sales above $1 billion. Apple launched IPO its third product in December 1980 (Yoffie & Baldwin, 2015). All this time the company was enjoying the power of PC monopoly.
In 1981 IBM entered the PC market which changed the competitive position of Apple in PC production. During this period in the 1980s, the two companies competed fiercely with each other making a product that was more superior to that of its competitor. The two competed in both the product quality through efficiency, portability, ease of use and price. IBM made products that were easy to use as compared to that of Apple since they applied the Microsoft DOS operating system. In 4 years, Apple had net income falling by 62% sending the company in crisis. Steve Jobs, the co-founder and “Soul” of the organization, was forced out. Between 1985 and 1997 the company experienced an on and off success when Jobs was out. In 1998 he came back as the CEO and changed everything. His first product in 1998, was the iMac, which provided the users with the ability to use plug-and-play peripherals (Yoffie & Baldwin, 2015). He changed the organizational culture where secrecy was his biggest weapon. The wake of the 21century saw the invention of portable computers (laptops) and Apple was able to make its PC portable.
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According to Yoffie and Baldwin (2015), the PC industry was becoming more competitive, and thus the company strategy included the expansion of its products portfolio. Thus, in 2007, the company launched its first mobile handset product the iPhone. The mobile industry was a highly competitive market in which, Samsung, Nokia, and Motorola controlling the industry. However, with the research and development competitive advantage of Apple, the company sales of its iPhones products in subsequent years increased. The company also launched the iPad the first minicomputer of its kind.
Overview of the company competitive advantage
Over the years Apple’s goal to be a leading company in innovation has given the company four main competitive advantages over its competitors in the industry. The company enjoys the benefit of brand strength. Research on brand strength did in 2016 indicated that Apple was the leading brand in 2016 ranking ahead of IBM and Coca-Cola (Heracleous & Papachroni, 2016). Brand strength gives Apple the advantage of market place visibility and building on customer loyalty. The interrelationship between the Apple products and strong brand entice consumers who purchase a single product to want and buy another. The company has the advantage of innovative products. The most reliable weapon that Apple possesses over all other competitors is its ability to invest in research and development which has made it an industry leader. The company revolutionized the PC industry in the dawn of PC and software development (Froud, Johal, Leaver & Williams, 2012). The iPhone and iPad brought about new levels of performance that other companies had to follow. It has been a leader in revolutionizing computers and mini-computers like smartphones and tablets.
The company also has a competitive advantage in using a robust integrated supply chain. The company has been able to develop a mutual relationship with its suppliers, developers, and partners. Since the early 2000s, Steve Jobs made secrecy his weapon against his competitors as he was an advocate of patent rights (Froud, Johal, Leaver & Williams, 2012). The company owns chips manufacturers which it controls the manufacturing, has a strict software standards policy and operates its stores. The company also understand the importance of partnership likes partnering with AT&L to market its iPhone products as a market penetration strategy (Yoffie & Baldwin, 2015). The company values the importance of a premium pricing strategy. Apple is known for premium prices and minimum discounts which is a strategy of keeping the costs consistent across the market.
Problem statements
The risk factors facing Apple are the transition in leadership and co-occurring issues of competition (Yoffie & Baldwin, 2015). Steve Jobs was a leader, a manager, an entrepreneur, and an innovator. Steve Jobs was a man who understood technology, the art, the market and was a visionary, aspects which he combined to develop blockbuster products. Steve Jobs was always way ahead of his competitors. During the launch of the iPad in 2010, he said that his responsibility as a business person and innovator is to figure out what the consumers are going to need before they do and not giving them what they want. It is his strategy that was able to shake competitors and always make a gap. It will be impossible for the company to replace the “ soul ” as he was known in the company. It was his organization as he had built it from his family garage, and had saved it from the face of bankruptcy to make it a giant organization. It was impossible for his successor to be successful (Yoffie & Baldwin, 2015).
Alternatives
The company alternatives in its leadership were to select an individual who had worked closely with Steve Jobs for a long time. Someone who knew and understood how Steve Jobs mind operated and how he was able to make his company work (Pitt & Koufopoulos, 2012). Choosing people who had worked with Steve Jobs would provide an insight on how Steve felt in giving the society products that they needed in the future, and the individuals would fight to protect the company’s patent rights as Steve Jobs did. An individual who knew how Steve operated would understand that the company is sustained through research and development of new products which set the pace in the market. Steve Jobs replacer had to be a visionary individual to lead the company in the right direction.
Another alternative for the company was to have a supportive board of management (Pitt & Koufopoulos, 2012). A board that knew and understood the art, technology, and market. Such a committee would ensure that the person in leadership followed on Jobs shoes. The board should also have a leader who is selected to have a supportive and innovative development team to enable the company to maintain its innovative nature.
Analysis
The advantage of selecting a leader who had a close relationship with Steve Jobs would be beneficial to the company. People who worked with Jobs knew that he was a leader who was ahead of his time. His love was in the invention of products that would lead the market. Innovation was the only true way to compete according to Jobs (Pitt & Koufopoulos, 2012). The leader would also know that to survive in the technology industry one had to maintain secrecy as it is the best weapon to beat large competitors like IBM, HP, Lenovo, and Samsung. The cons of selecting an individual who was close to Jobs is the fact that he might not have a love for technology in the heart. The person may lack the necessary motivation to innovate products that will maintain the organization’s place in the market. Such an individual would kill the innovation aspect of the organization.
The advantages of having an ambitious board of management in place are that it will keep the mission and vision of the organization alive (Pitt & Koufopoulos, 2012). The administration would ensure that the person selected to lead the organization to maintain the organizational culture. A board of management would ensure that the company follows Steve dream of making the company the industry leader. The cons of having management in place are that it would make the decision-making process slow. The management must make a vote to make a decision, and thus it would slow down the company's ability to compete with other large tech companies.
Decision
The answer to addressing the problem is to select a leader who has similar goals to those of Jobs. A leader who can drive the company in the same direction as it has done in the decade. The executive officer must be able to execute his responsibility without contradiction from the management. Selecting such a leader would be difficult but with a profound review of managers who worked with Steve Jobs may bring in a better picture. Organizational leadership determines the future of an organization (Pitt & Koufopoulos, 2012). If Apple Inc. fails to find a replica of Steve Jobs, it will be hard for the company to compete in the Tech world. It is vital for the company to provide support to the leader of the company. It is through such support that the company will maintain and continue the legacy of Steve Jobs and see the company maintain its position as a tech leader. One person in leadership with the help of good management is preferable to having a board of management in place.
Action plan
The Action plan is to review people who worked closely with Steve Jobs. Choose an individual who has a similar motivation to Jobs and makes that person the leader. Besides, all the other managers should form part of the management board to help the CEO to lead the company into the future (Pitt & Koufopoulos, 2012). The selected individual should have a five-year plan for the company which should be analyzed and evaluated by the board of management. The individual must have the vision to lead the organization in the right direction.
The contingency plan for the company is a strong management board in place that will be able to manage the company if the plan fails. Having a board of management in place will ensure that the company follows the right direction before a lasting solution is found. A management team will ensure that the company ’s vision and mission are met in the long run and that the company’s future is bright (Pitt & Koufopoulos, 2012).
References
Froud, J., Johal, S., Leaver, A., & Williams, K. (2012). Apple business model. Manchester: CRESC Working Paper , (111), 1-29.
Heracleous, L., & Papachroni, A. (2016). Strategic Leadership and Innovation at Apple Inc . SAGE Publications Ltd.
Pitt, M., & Koufopoulos, D. N. (2012). Essentials of Strategic Management. London: Sage.
Yoffie, B. D. & Baldwin. E. (2015). Apple Inc. in 2015. Harvard Business School.
