2014 Spring Model Case Apple Essay

Main Problem
Apple, Inc. started out as “Apple Computer, Inc.” in 1976 as the brainchild of co-founders (the late) Steven P.
Jobs and Stephen G. Wozniak. The seed of the company was planted to grow products based on Innovation – the creation of innovative computing products. The company achieved success in a relatively short time span, and experienced vicissitudes early-on. After the first decade, the company experienced a downturn, which started from the mid-1980’s and continued into the mid-1990’s. Co-founder Steve Jobs, who separated during the 80’s due to internal conflicts, returned to the helm in 1997. In the decade that followed until his death in 2011, Apple experienced unprecedented growth, going from a company teetering on the verge of bankruptcy, to becoming the world’s most valuable company.
The company’s astounding success may be attributed to several factors, most prominent of which were a mission and culture of innovation under the leadership of Jobs, a marketing program targeted at establishing the iconic and prestige-dominance of Apple and its products with cult loyalty following, and a supply chain tailored to support the company’s marketing mission and goals.
The company underwent a complete makeover in terms of its mission. It redefined itself from a computing product to a consumer product company, and changed its name to “Apple, Inc.” in 2007. In a short span of a decade, the company unveiled one innovation after another at a brisk pace: the iPod, the iPhone, the iPad, iTunes and the App Store.
Besides this, its legacy Mac computer systems also received uplifts and retained their loyal followers. On the Promotion and Distribution sides, it set trends with its chain of retail Apple Stores that acted as showcases for its products. It put into place a supply chain system to support the demand created by the marketing initiatives.
However, the company has had its fair share of challenges, and is expected to face more in the days to come.
The blaze of innovation that transformed the company was attributed directly to Steve Jobs’ demanding, abrasive and brutal leadership style (Mui, 2011). After Jobs’ demise in 2011, the world at large questioned the ability of the company to maintain its momentum. The company is also faced with growing external threats, most notably from industry rivals
Google, Microsoft and Amazon. While Apple has managed to stay in the lead, it has seen its market share shrink, with its stock price dropping from a record high of ~$702 in September 2012 to the present $527 in February 2014 – a drop of nearly 25% (Yahoo! Finance, 2014). The number of weaknesses and threats the company faces are several, as cited in the 10-K filed for the period 3Q2013 with the SEC (Apple, Inc., 2013) ranging from domestic and global economic conditions that impact demand, to dependency on its supply chain, and the ability to successfully predict consumer behavior to drive innovation – the reason why it failed and collapsed in the ‘80s and ‘90s.
Apple’s main problem is how does it successfully maintain its dominant position as one of the world’s most valuable companies, as measured by its market capitalization (Badenhausen, 2013), and remain at the top of its product market?

Marketing Issues
Marketing has long been an important facet of Apple’s strategy. The case notes that former CEO John Sculley referred to Apple as a marketing company. However, critics wonder if Apple’s position as a “cool” option in the technology marketplace is realistically sustainable, considering that Apple is a global leader and the most valuable brand in the world. This may be a moot point, though, considering that Apple users are fiercely loyal and protective of the
Dated: March 16, 2014

brand. Apple was cool when it needed to be, as the markets for MP3 players, smartphones, and tablets exploded, and now its customer base seems content to remain with Apple. This doesn’t take the PC vs. Mac competition into account, but Macs are

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