Apple
Apple
Apple
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Apple was founded in 1976 by Steve Jobs, Ronald Wayne, and Steve Wozniak. Nobody
would have predicted that the same company would grow to one of the largest, most
profitable, and innovative companies ever. Although it has experienced many growing
pains and changes in management, Apple managed to become the world’s most valuable
company by market capitalization in 2011, growing from $2 billion company to $417
billion company in 14 years. Since the beginning Apple has been an innovative company
offering products at a premium price. The management and leadership at Apple has
always stuck by providing quality products that offer the latest technology.
The company, started on April 1st, 1976, began selling the Apple I which was a personal
computer. As young entrepreneurs, Wozniak and Jobs were eager to take risks and had
very little to lose. The third shareholder, Ronald Wayne, was older and more established.
Not wanting to risk losing what he had, he sold his share in Apple back to the other two
from $800. Today that share would be worth over $3 billion.
Apple thrives off of innovation and it essentially defines the company. Steve Jobs often
referred to a quote by Wayne Gretzky, “A good hockey player plays where the puck is. A
great hockey player plays where the puck is going to be”. Steve Jobs was able to
accomplish this with business by being able to exceed consumers needs and wants with
every new version of Apple products. The innovation created technology that people did
not even know was possible and now that they have it they cannot imagine living without
it.
The company has not always been a success story and was once referred to as the
underdog of the computer industry. The 12-year period where Steve Jobs was absent
from the company, many issues began to surface and Apple struggled. The highly priced
products and increased competition from IBM effected the company’s already low
market share. Many alterations were made within the company and three different CEOs
attempted to save Apple from potentially going out of business.
When John Sculley took over the company in 1983 he was only able to increase the
market share from 7% to 8% in his 10 years as CEO of Apple. Many different attempts
were made to gain more customers and Sculley even established alliances Novell and
Intel in an attempt to make Apple’s OS run more efficiently and save money. Neither of
which were accomplished and the gross profits dropped 16% in Sculley’s time as CEO.
Michael Spindler was the next CEO and during his tenure he undid everything that
Sculley attempted to create with other companies. Spindler was to t focus on growing
internationally and cutting cost. After three years he was replaced by Gil Amelio who
insitituted three successive restructurings and plans to cut cost further. At the same time,
Amelio wanted to reinstitute the premium pricing. The problem was that Apple’s new OS
system, Copland, was behind schedule, overbudget, and its release was at a standstill.
Meanwhile, Microsoft Windows 95 was being released and already had great reviews
which force Apple to look for help from a Steve Jobs’ new software company named
NeXT.
NeXT ended up successfully helping Apple and the board of directors decided to
purchase the company. In 1997, the company was in turmoil, had net losses of $708
million in one quarter, a $3.30 stock, and bankruptcy seemed like a viable option. The
competition continued to gain momentum in the late 1990’s and Apple was forced to
make a decision. The offered Steve Jobs the CEO positions and he accepted it. Steve Jobs
worked the first 30 months of his time as interim CEO for $1 year salary. From the
beginning, Jobs set up the new culture of Apple. He showed up to the first board meeting
with the top executives wearing shorts, sneakers, and a few day old beard.
Steve Jobs leadership turned the company around
Apple products cause a divide amongst many consumers. On one side there are Apple
enthusiasts, that are loyal and love what the company stands for. The other customers
usually have little experience with their products and are very critical of purchasing them
or even having to use them.
Apples strategic business management is the reason they are so successful. As a company
the leaders and management are able to build on their strengths and identify where their
weaknesses are located. Unlike some companies that may only have one competitive
advantage, Apple has many that they use to establish their dominance throughout the
technology industry. The first is the amount of products they manufacture and the wide
array of customers that use their products. The provide hardware, software, technological
services, and also sell retail products. Their customer base is loyal and once they become
Apple customers they tend to buy other Apple merchandise.
One way Apple stays ahead of the competition is through secrecy. There are very few
people who know what goes on behind Apple’s doors and even fewer who understand
what happens. When employees start working for the company they are held to strict
confidentially agreements. The only person at liberty to discuss Apple was CEO Steve
Jobs. Before the product launches, Apple holds back the announcement for as long as
they can. This allows the current model of the product to sell without taking away from
current sales. Once the new product is released, the new product is priced lower price so
it appeals to the broader market.
Product usability, design, and simplicity
Xgra
As a former employee describes: “There was a project we were working on where we put
in special locks on one of the floors and put up a couple of extra doors to hide away a
team that was working on stuff. You had to sign extra-special agreements acknowledging
that you were working on a super-secret project and you wouldn’t talk about it to anyone
– not your wife, not your kids.” (Lashinsky, 2012).
Meetings
Apple’s organizational structure is designed like a startup company and developed for
agility and focus. Because of the talented and highly educated people that work for Apple
they tend to keep the teams small no matter how large the project. This allows everyone
to stay busy and contribute a significant amount of work. The people who for Apple are
held to a higher standard to perform and a lot is expected of them. When Steve Jobs
attends his weekly business meeting, he looks at every product in development. The
majority of the agenda is a review from the previous week and involves status updates.
Often times on the spot the decision will be made if the project will continue or get
scraped. Although there is a lack of structure processes at Apple, the leadership is
efficient at keeping everyone on the same page. During the marketing and
communication meeting an action list is created which includes the name of the directly
responsible individual (DRI). This is where employees performance and progress gets
discussed.
Another meeting Apple holds is their annual 100 most influential employees. They meet
to discuss strategy, issues, and the current and future state of Apple. It is held in a secret
location and employees are bused out there from the Cupertino headquarters. Hierarchy
does not have anything to do with the selection process and everyone has an equal chance
of attending the meeting.
The company prides itself on being different culturally and structurally. Employees at
Apple have to have the same drive as the leadership – a rebel spirit and thrive for
perfection. During product development, Apple engineers spend so much time working
with the product that they are able to foresee any issues that users might encounter when
they use it.
The pay at Apple is not as high as one would think compared to the amount of time and
effort the employees dedicate to the company. They do it for the satisfaction of being
creative and innovative, when hiring new employees candidates mush have a passion and
drive for excellence.
Apple’s recruitment efforts are focused towards the highest quality people for the job.
The company looks for people who have a solid reputation in their field and share the
same mindset of the organization.
Jobs wanted to focus more on the specialization and clear specification of job
responsibilities and avoiding a general management structure.
Apple developed and iBuddy progam to support new employees
As Jobs has stated, “we have wonderful arguments. If you want to hire great people and
having them stay working for you, you have to let them make a lot of decisions and you
have to be run by ideas. Not hierarchy. The bet ideas have to win. Otherwise good people
don’t stay” (Jobs, 2010).
Compared to other tech companies such as Google, the atmostphere is not relaxed and is
known to be tough and strict when it comes to accountability. Employees are not coddled
and treated as new comers when they first come aboard. They are expected to know what
basics of building relationships with other employees, connecting into a network, and
asking coworkers for assistance if needed. This allows them to build relationships and get
to know one another.
Organizatonal design.
The company’s organizational design is one in its own and fairly flat and simple. Apple
was centered around Steve Jobs who was surrounded by 15 Senior Vice Presidents, and
31 vice presidents who managed the main functions of the company. On the hierarchy
chart, Jobs was never further than two steps away from any key part of the company. The
Chief Financial Officer manages all the cost and expenses of the company and helps limit
the amount of communication channels and processes. Jobs has never been an advocate
of establishing process or supporting beauracratcy. He believes that structure and
procedures limit the amount of free flowing ideas and stifle innovation.
Aggressive vision
Jobs was an inspirational leader but often described as intimidating with a scary
demeanor. He was very forward when it came to dealing with business and ideas, he
would often tell employees on the spot if he liked their ideas or thought they were
worthless. This reaction made employees work harder and seek praise from Jobs.
Jobs sick
Jobs was diagnosed with pancreatic cancer in 2003 and six years later announced that he
would be taking a leave of absence for Apple. The Chief Operating Officer (COO), Tim
Cook, would take over daily operations and Jobs was scheduled to stay involved in the
major decisions of the company. Although Jobs did return he was forced to resign in
August 2011 and passed away in October 2011. Because of the abnormal structure of
Apple, the absence of Jobs was expected to have a profound effect on the employees and
operations.
Many people doubted Tim Cook at first but his experience with Apple since 1998 made
him a good candidate to take over for Jobs. He was familiar with the environment and
culture which is like no other company. The atmosphere is flexible but extremely focused
and the CEO position is more than just an executive position. Cook understood the
complexity and ensured the employees that the company would not change.
“ the one thing about Apple that will change going forward is that we are not going to see
one person representing himself as the physical manifestation of all Apple” (Menn and
Dembosky, 2011).
Cook was known to be quite the opposite of his predecessor, often charachterized by his
soft-spoken, quiet, modest attitude but could be just as demanding and unemotional as
Jobs.
Company core values – the relentless perfectionism, the focus on design, the close cross-
functional collaboration and constant feedback loops.
Although in Cook’s first few months as CEO Apple reported the company’s highest
quarterly revenue, questions were still being asked about his ability to maintain the
culture at Apple.