Apple is one of the most famous companies in the world, and part of its allure is because of the interesting way in which it was founded. The company started, like many of the great tech companies of the twentieth century, in a garage. Steve Jobs came up with the idea for a new computer, and he went about the business of recruiting top-level executives to help him put together the company. Steve Wozniak was the most important original partner, as it was his design that allowed Apple to sell its first computer, the Apple I. This was essentially just a motherboard, and it had limited functionality when compared to the computers of today. Still, this particular computer set the stage, and it first sold for what would be around $2,500 in today’s dollars.
While the company had success at first, and it pursued a very aggressive strategy in the beginning, the company eventually fell on difficult times. Steve Jobs was ousted from his own company by the board, and Apple went through a period of non-profitability during the 1990s. The company eventually returned to profitability after it brought back Jobs, who had been off developing his own new technology and working on the Pixar project. A renewed Jobs turned Apple into more than just a player in the computer world in the 2000s. In addition to personal computers, Apple integrated the technology of Apple, allowing the company to produce a range of products, including hand-held music players, tablets, desktop computers, and even phones, all of which operate with largely the same operating capability. Jobs died late in that decade, leaving the company in the difficult position of trying to carry on his legacy while also looking forward to the future.
When most people think of Apple, they think of Steve Jobs, and rightly so. Jobs is the man behind the technology, but more than that, he is the man behind the concept and branding of Apple. Jobs has many different characteristics that set him apart from other entrepreneurs. Principally, Jobs is a significant risk taker. During the early part of Apple’s run, Jobs went about the business of recruiting not only the best technology minds in the world, but also some of the best branding minds in the world. He went to recruit marketing personnel from Coca-Cola, for instance, bringing one Coke executive over by asking that person whether he wanted to make sugary drinks or whether he wanted to change the world. In addition, Jobs was willing to leave what, for him, was a very good job in order to start his original company. Rather than taking the small gain in the short term, Jobs was able to delay gratification to the longer term, which is the primary reason why he has able to have such tremendous success with Apple.
In addition, Jobs understood how to be resilient. This is something that Jobs picked up very early on in life. He was adopted as a young man, and his family did not have very much money. In fact, he went to an expensive college and dropped out because he did not feel comfortable spending so much of his parents’ money when he had no idea what he wanted to do. He bounced back from that, though, auditing the classes that interested him the most. Later in his career, he showed resilience again. After he was effectively fired from his own company, he did not sulk. Rather, he went out and established his own company. He developed new technology that not only made him some money, but also contributed to the future success of Apple. Jobs understood that when one engages in business, it is routine to get knocked down a few pegs. Rather than sulking his way through situations, Jobs was constantly prepared to move on to the next thing and the next opportunity. This, too, has been his reputation during his time with Apple. Many things about Apple and with Apple have been what one might call abject failures. Various iterations of the iPod, for instance, have failed to live up to the Apple standards. What Jobs understood was that the only way to have success was to constantly keep moving the company forward toward more and more success.
Likewise, Jobs was a compelling leader that understood how to bring people together. The integrated decision-making team at Apple is evidence of this. The company did not operate like many companies with regional directors and different departments. Rather, he ensured that various ideas were floating around throughout the company, giving Apple the capacity to connect its various forms of technology in order to provide the optimal result. This is one of the marks of a good leader, and it something that Jobs was constantly striving to do.
Apple’s strategic strategies have not been perfect, but overall, the company has done the right thing more times than it has not. Strategically speaking, Apple positioned itself as a company that was all about the changing consumer. This is what the original Apple computer was all about, and it was also what the later iterations of Apple products became. In the 1980s, Apple decided that a major part of its strategy was going to be accounting for the newly mobile business consumer. This is why the company developed its mobile computer during that time, and while that computer was only a modest success, it showed Apple that it could compete using that strategy in the future.
Likewise, one of Apple’s strategic directives has been based upon the concept of horizontal and vertical integration. A company like General Motors might break up its various divisions. It might have many different brands of products. It might also have regional offices that handle various functions around the world. Apple has not done this. Rather, Apple has done the difficult task of pulling all of its design and decision-making resources together. The company markets and sells its products under one name. In addition, its management and organizational style ensures that the same people who work on the Apple computer also work on the iPhone and tablets. Not only does this allow for symmetry between products in terms of design and aesthetics, but it also provides Apple with the ability to create products that can be linked. This is a good means of appealing to its existing base of consumers.
The company has also been smart in strategically pursuing its unique brand. The Apple brand has become synonymous with innovation, and customers identify more with the brand than with the products themselves. The company seems to operate on the understanding that if people believe in the company and what it stands for, then people will eventually purchase products based upon this belief in a company’s brand.
In terms of operational and competitive strategies, Apple has very smartly cornered the market in terms of its production line. Especially for its phones, Apple has significant control over its supply chain. What this means is that Apple essentially funds the research that goes into creating the screens and other elements of its phones. It has created a system where its suppliers are dependent upon Apple for the technology to produce the things that Apple needs. As one might suspect, this provides Apple with both an advantage over competitors and the ability to control its own production costs.
In addition, Apple has very smartly chosen to focus on a small sub-set of products. During the 1980s, Apple tried to do too much. It tried to produce cameras and a host of other pieces of technology. This is no longer the case, as Apple figured out which products buttered its proverbial bread. It then focused its research and development resources on those things, bringing back the best returns rather than being only moderately successful at researching a wide range of products.
Tim Cook is in the difficult position of trying to guide this company into the new age, without Steve Jobs. Cook cannot be Jobs, and he should not try to be. Rather, he should put his own management stamp on a company that already has a strong brand, much of which still comes from the personality of Jobs. One of the things that Cook can extrapolate is the corporate culture of Apple. While Apple is not necessarily Google in terms of its openness and employee culture, it does have the sort of open, modern culture that attracts top employees. This is something that should continue, and Cook may even be able to do more in terms of opening up the Apple culture.
In addition, the integrated structure of the company is something that will likely benefit Cook down the road. It is smart to have all product ideas spring from the same place. Given the empire that Apple has built and the way that so many people, especially in the United States, are dependent upon Apple products, it would be wise for the company to use that momentum in order to further capitalize on sales. The company should come up with ways for its new products to play off of its existing products. When one saves something on his or her iPad, it goes into a cloud and ends up on the person’s iPhone. This technology is a positive thing, and it comes from an integrated structure that Cook should continue from what Apple has done in the past.
John Tarpey’s concerns are very real, and they are, of course, reasonable. He should be concerned about whether Apple can continue in the post-Jobs era to have the kind of culture that Jobs fostered. Apple depended upon Jobs, but one might say that the Jobs brand is still around. As long as Apple is able to capitalize on the momentum started by Jobs, it should be able to benefit from his continued presence in the company. Ultimately, Steve Jobs was special, but his ideas were more special. If Apple focuses its efforts on preserving those ideas, then it has a much better opportunity to succeed in the future.
In addition, there are concerns about the competiveness of the industry. Many different players are now making the devices that has made Apple so special. Ultimately, Tarpey must see that Apple has some sustainable competitive advantages. The company’s research and development is far above most competitors, but the presence of Google of in this industry is a concern. These are things that set Apple apart, but it is conceivable that some company could pass Apple in the future. No company will be able to match the sort of branding that Apple has developed, though. By being the first company of its kind, Apple has developed a lasting cache of credibility that cannot be matched by a subsequent company, so Apple will have at least some advantage over the long run.
- Carlton, J., & Annotations-Kawasaki, G. (1997). Apple: The inside story of intrigue, egomania, and business blunders. Random House Inc.
- Deutschman, A. (2001). The second coming of Steve Jobs. Random House LLC.