How Is Apple Inc's Strategy Different than It Was in 1995 - Essay Example

How is Apple Inc.’s strategy different today than it was in 1995? Apple until 1995 In 1995, Apple Inc. was known as Apple Computer Inc. and it remained true to its co-founder’s goal of primarily being a micro-computer manufacturer although it also manufactured a few consumer devices such as the Newton, a personal digital assistant (PDA) (“History of Apple Inc.,” 2012). The company had developed several models of its Macintosh computer brand that were minimally different in their specifications.

This stretching of the Macintosh product line cannibalized the company’s revenues because the numerous models confounded consumers. Apple had also gotten into licensing arrangements that authorized select third parties to manufacture Macintosh clones. At this moment in time Apple was performing poorly on several fronts to the extent that Alsop (1996) referred to it as one of the industry’s worst managed organizations. Apple’s market research and product development were not in synch as the company consistently either overestimated or underestimated demand such that there was a glut of unpopular models and shortage of popular models.

The company’s marketing strategy was also weak given that consumers viewed Apple brands to be more expensive than for competitors whereas in reality this was the opposite. The major competitors to Apple at this juncture were IBM and IBM clones in computer hardware and Microsoft Windows in operating system software. The release of Windows95 later that year further led to the reduction in market share for Apple computers as Microsoft had not only mimicked the Mac’s GUI but had also come up with a better GUI version.

This was a big blow to Apple because developing the GUI technology was one of the company’s core competencies. However, Apple did enter into an alliance with IBM and Motorola (AIM) with the aim of revolutionizing the global computing platform where Apple was to provide software while the other two provided the hardware. This alliance resulted in the production of the PowerMac family of PCs that were based on the PowerPC chip. This enabled Apple to compete with Intel’s newer processors. However, AIM failed to achieve its overall goal of changing the computing platform.

Apple post 1995 Apple’s turnaround begun in earnest in 1997, with the re-appointment of Steve Jobs back at the helm as the company’s CEO. Jobs terminated the agreements with third parties who made Macintosh clones and cut down the company’s product line from 19 to four products (Siegel & Gibbons, 2009). The company began to focus on producing a smaller range of products with greater quality, easy-to-use attributes and aesthetic designs. By narrowing its product line Apple has ensured that it restricts itself to developing products where it owns and controls the primary technologies.

This implies an increased focus on using core competencies to develop and sustain the company’s competitive advantages now and in future. Most of all, as the current CEO, Tim Cook stated in 2009, the company is currently obsessed with excellence to the extent that it only participates in markets where it sees it can have a significant contribution (Chaffin, 2009). Apple changed its core business from computers to consumer electronics which is epitomized by it dropping the word “computer” from its official name in 2007 (Siegel & Gibbons, 2009).

This is supported by the change in corporate strategy as well, unlike pre-1996 when the company concentrated on manufacturing devices, Apple now concentrates on creating platforms or products that complement each other to present as a complete solution. For example the iPod is a media player, while iTunes is the media store that makes Apple consumers have a seamless platform to enjoy media offerings. Apple’s change in business focus from computer manufacturing industry to consumer electronics industry has also meant that the company faces new competitors.

Apple’s major rivals currently are companies that have also had success in not only creating consumer electronic technologies but that also have robust platforms. The three big competitors that have demonstrated competitive excellence, strategic genius, and superb execution as Apple are Google, Facebook and Amazon (Manjoo, 2011). Summary The key differences between Apple in 1995 and now are four. First, the company has heeded the advice of Prahalad and Hamel (1990) that organizations should seek to compete in core competencies rather than products.

This way the post-1995 Apple is better able to consistently be a step ahead of its competition in terms of the products it comes up with. Secondly, unlike in 1995, Apple has sharpened both its marketing strategy and resource deployment in this area to the extent that the organization has one of the industry’s highest customer loyalty levels. Thirdly, the current Apple has integrated forwards by establishing its own network of retail shops. These shops enable the organization to retain more value from its sales, enhance brand image and gather customer and market research.

Finally whereas in 1995 Apple’s stocks were at one of its historical lows, the company is now the most valuable company in the world with one share currently valued at US$ 573.20 (“AAPL Stock Price Today - Apple Inc.,” 2012). References AAPL Stock Price Today - Apple Inc. (2012, April 22).WSJ.com. Retrieved April 22, 2012, from http://quotes.wsj.com/AAPL Alsop, S. (1996, February 5). Apple of SUN’s eye. Time. Retrieved April 22, 2012, from http://www.time.com/time/magazine/article/0,9171,984054,00.

html Chaffin, B. (2009, January 21). Apple COO Tim Cook Lays Out Apple Manifesto, With or Without Steve Jobs. The Mac Observer. Retrieved April 22, 2012, from http://www.macobserver.com/tmo/article/apple_coo_tim_cook_lays_out_apple_manifesto_with_or_without_steve_jobs/ History of Apple Inc. (2012, April 22).Wikipedia. Retrieved April 22, 2012, from http://en.wikipedia.org/wiki/History_of_Apple_Inc.#cite_note-alsop19960205-29 Manjoo, F. (2011, October 19). The Great Tech War of 2012. Fast Company.

Retrieved April 22, 2012, from http://www.fastcompany.com/magazine/160/tech-wars-2012-amazon-apple-google-facebook Prahalad, C. K., & Hamel, G. (1990). The Core competence of the corporation. Harvard Business Review, (May-June), 79 – 91. Siegel, M., & Gibbons, F. (2009, July 13). Apple Inc and the E-book Reader. Stanford University School of Engineering.