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Apple Inc. Essay

Apple Inc., formerly Apple Computer Inc., is a multinational American corporation that designs and manufactures consumer electronics and related software products.  In 1976, high school friends Steve Wozniak and Steve Jobs produced a single-board Apple I computer in a garage workshop.  The pair managed to sell 200 computers, and on this basis, Jobs was able to attract some investors.  Wozniak and Jobs co-founded Apple Computer Inc. The company was incorporated on January 3, 1977, the same year they produced the Apple II computer.

The Apple II came with color graphics and an open architecture, unlike other major competitors.  Apple was chosen to be the desktop platform of the VisiCalc spreadsheet program.  This allowed Apple Computer to expand beyond the selling of personal computers and venture into the business market.

In 1983 Apple introduced the Apple Lisa, the first personal computer sold to the public with a graphical user interface (GUI).  The following year Apple launched the Macintosh, the success of which can be attributed to its graphic capabilities.  The company became public on September 7, 1984.

In 1989, Apple introduced the Macintosh Portable, and later the PowerBook in 1991.  Shortly afterward, Apple introduced a variety of failed consumer electronics including digital cameras, portable

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CD players, and TV appliances.  Meanwhile, competitor Microsoft was focusing on delivering Windows software to personal computers at a low price.

In an attempt to compete with Microsoft, in 1994, Apple, IBM and Motorola formed the AIM alliance, with the goal of creating a new computing platform.  In 1997, Steve Jobs announced that Microsoft and Apple would release Microsoft Office for the Macintosh.  In the same year, Apple opened the first Apple store, which was part of a new build-to-order manufacturing strategy.

In 1998, under the design leadership of Jonathan Ive, Apple introduced the iMac.  The iMac sold close to 800,000 units in its first five months and thus returned apple to profitability for the first time since 1993.

In 2001, Apple introduced the iPod portable digital audio player.  In the first six years, over 100 million iPods were sold.  Apple launched the iTunes store in 2003, through which online music downloads were available for $0.99 a song.

In 2007, at the Macworld Expo, Steve Jobs announced that Apple Computer Inc. would be known as Apple Inc., in order to reflect the company’s ongoing expansion into consumer electronics in addition to its traditional focus on computers.  The iPhone and Apple TV were also announced.

Today, Apple develops, sells and supports personal computers, media players, computer software and computer hardware.  Apple employs about 75,000 employees worldwide, and announced worldwide annual sales of US $32.48 billion in its fiscal year ending September 29, 2008.  Over the years, Apple has forged a unique reputation in the consumer electronics industry.   industry.

Leadership Style

The management style of Steve Jobs is characterized as at most as charismatic. The invaluable ability of Jobs during uncertain and anxious times to dispel feelings of ambiguity is what has made him highly successful. With the exception of grief, there is no feeling more emotionally disruptive than the helplessness induced by not having a sense of direction or purpose in life. And the “reality distortion field” that leaders like Jobs bring to ambiguous times is just what the management doctor ordered.

Another key aspect of his management style is his demand for perfection, not only from himself but from the other members of the company as well.  Steve Jobs is noted for being unable to stand by if someone is going in what he considers the wrong direction.  The sadistic perfectionism that characterizes the management style of Steve Jobs has kept Apple ahead of the curve time after time; from the adoption of USB, to consumer digital movie-editing, to wide-spread use of DVD burners, to making portable music players a must-have, to online music downloads.  His style of management and his ability to accurately predict trends makes him more than just a valuable industry leader; it almost guarantees that those who pay attention will reap the profits of his predictions.

While his management style of being able to bring the best (or the most according to certain articles) out of his employees has brought Apple to where it is right now, there are also weaknesses to using this type of management style.

Perhaps the most obvious weakness is the fact that the intensity of Steve Jobs cannot be matched by his employees and those who are not able to keep up with him soon find themselves fired.  The management style of Jobs is in motivating people to produce and to be perfect but it also has a downside since those who are unable to do so are released, so to speak.  From a management perspective, it is a systematic weeding out of all employees that are seen as unfit to work amidst the fast paced and highly competitive field of consumer electronics.

While most newspaper reports and accounts speak of how Steve Jobs has created a better working environment at most of his corporations, there is also another side which isn’t shown.  Those who disagree with his management style are no longer with the company to complain about it.

The management style of Steve Jobs is characterized by a strong and willful leadership that expects the most out of all of his employees.  While there have been many advantages and the case of Apple is one of them, a management style such as that cannot be sustained over prolonged periods because it does not factor in the development of the employees.  As Steve Jobs has announced a leave of absence until June 2009, it remains to be seen if any changes in his leadership style will occur upon his return. 

Mission Statement & SWOT Analysis 

Apple’s mission statement commits the company to the protection of the environment, their employees and the communities in which they operate.  They aim to integrate environmental, health and safety management into their business to offer innovative products.

Strengths

Over the years, Apple Inc. has cultivated a unique reputation in the consumer electronics industry.  In doing so, Apple has developed a very loyal group of customers, who openly advocate the brand and readily purchase a variety of Apple Computer products.  These customers not only encourage new customers through word of mouth, but also ensure continued business.

Apple constantly updates the technological and aesthetic sides of their products, and frequently announces newly released products.  The expansion of Apple into consumer electronics beyond personal computers has enabled them to reach out to customers who did not previously consider purchasing their computers.  For example, the compatibility with non-Macintosh operating systems and the ergonometric design interface of the iPod have made it a widely successful product.

New Apple computers are now designed to be able to run non-Macintosh operating systems such as Windows.  This change has allowed Apple to diversify their customer base through the inclusion of customers who prefer to use operating systems such as Windows and Linux.

Weaknesses

Throughout the years, Apple has seen several changes in leadership with six different CEOs since 1977.  Each CEO has attempted to mold the company according to his vision.  As a result, there have been several internal power struggles within the Apple corporate structure.  Such instabilities and frequent changes in the management may result in a less-focused company and a lack of continuation for products under development.

Apple has ventured in a broad range of consumer electronics, yet maintains a centralized style of leadership.  In the future, this concentration of power may prevent the company from being able to immediately respond to the demands of the public.

Opportunities

The main opportunity for Apple lies in improving its stake and share in the portable media device market.  The main strength of Apple is its marketing and creation of user friendly products.  The Ipod and the Iphone are prime examples of the strengths of Apple which is should capitalize on.  With the market crisis, there is a reduction in the number of people willing to purchase high ticket products.  Apple offers relatively cheap products that are multifunctional (think Iphone).

Another opportunity that Apple can make the most of is the ever growing Asian market which cannot seem to get enough of trendy Apple products.  The emerging Chinese and South East Asian market is the perfect area for Apple to improve and increase its sales.  This will allow Apple to penetrate a market that was previously dominated by electronics giants such as Sony and Samsung.  With the volume of sales currently generated in the Chinese market, Apple should make the most out of the current iconic status that it holds.

Threats

The IT industry is highly competitive.  At present, the popularity of the iPod and Macbook laptops have greatly contributed to the success of Apple.  However, as popularity is subject to demand, the company’s sales may begin to falter with the present economic crisis. The loss of jobs, home mortgage foreclosures and other consumer-level actions have affected America’s buying power. If the crisis continues, consumers will become even more conservative in their spending habits.

When purchasing consumer electronics, they will look for the most reasonably priced and practical products.  Though Apple products are generally reputed to be aesthetically pleasing and high quality products, they are quite expensive.  Consumers may opt for a cheaper alternative.

In the past, Apple has had difficulty with employee confidentiality.  In 2005, the specifications of several Apple products were listed on the internet prior to the official release of these products.  As such, competitors and imitators were able to produce their own versions of Apple products.  Such breaches of commercial confidentiality may recur in the future.

In the recent past, replicas of Apple products such as the iPod have surfaced, particularly in Asian countries.  These replica products have similar features to genuine Apple products, but are sold at much lower prices.  Instead of purchasing expensive Apple products, consumers may choose to buy the knock offs. 

Investment in Innovation

In 2007, Apple was named America’s Most Innovative company.  It was ranked first by Fortune Magazine’s most innovative companies in 2007, by the BW-BCG in their top 25 most innovative companies, and was also ranked first in The Wired 40.

While other companies design products based on market research, at Apple, design research is based on creative problems and opportunity finding, not on problem solving.  Apple’s commitment to innovation is a testament to the fact that good ideas can come from anywhere.

When Steve Jobs was interviewed by Business Week Magazine in 2004, he was asked how Apple systemized innovation.  He replied that “the system is that there is no system.”  He went on to clarify that the lack of system did not mean a lack of a process.  He explained that innovation in Apple is the result of a casual company culture and a focused approach to projects to ensure the company does not get on the wrong track and that the company does not over commit itself.

Innovation is of paramount importance in Apple Inc. culture.  Apple can attribute much of its early success to the fact that it was the pioneer in the usage of a graphical user interface in personal computers.  Apple’s innovations have also lead to the development of the iPod and the laptop computers, which produced the company’s first profits after years of loss.      

Environmentally Friendly Image

In 2007, Greenpeace International ranked Apple Inc. last in environmental friendliness among major electronics makers. Greenpeace spokeswoman Iza Kruszewska said Apple had met legal requirements and basic standards, but had not stopped using several types of harmful chemicals in its manufacturing.

According to their website, in October 2008, Apple began providing customers with estimates of the greenhouse gas emissions generated by each new product sold. Their website claims that the manufacturing and use of a results in 460 kg of CO2e emissions over four years of use, which is approximately the same amount the average car emits in a month. Apple claims that no other electronics company has reported this information at the product level, and thus claims that is impossible to compare their carbon footprint with those of their competitors.  Customers and consumers can track the carbon footprint of Apple’s everyday operations at their Environmental Performance website.

Apple’s transparency with regard to their environmental impact and carbon footprint is admirable.  The fact that many companies are so focused on profit that they often neglect the negative impact that they have on the environment.  As such, the corporate social responsibility that Apple practices is a model that should not only be admired but emulated.

References: 

Linzmayer, Ronald W. (1999). Apple Confidential: The Real Story of Apple Computer, Inc.

Langer, Andy, “The God of Music? If Apple’s Brash and Bold New Digital-Music Venture Works, That’s Pretty Much What He’ll Be: A Conversation with Steve Jobs,” Esquire, July 2003, pp. 82–85.

Quittner, Josh, “Steve Jobs: The Fountain of Fresh Ideas,” Time, April 26, 2004, p. 75.

Young, Jeffrey S and Simon, William L iCon – Steve Jobs: the Greatest Second Act in the History of Business, Wiley, ISBN 0471 720 836 published 25 May.

Associated Press. “Greenpeace ranks Apple last for green – Environment- msnbc.com.” Breaking News, Weather, Business, Health, Entertainment, Sports, Politics, Travel, Science, Technology, Local, US & World News- msnbc.com. 7 May 2009

<http://www.msnbc.msn.com/id/17948535/>.

Burrows, Peter. “The Seed of Apple’s Innovation.” BusinessWeek – Business News, Stock Market & Financial Advice. 7 May 2009

<http://www.businessweek.com/bwdaily/dnflash/oct2004/nf20041012_4018_db083.htm>.

“Apple – Environment.” Apple. 7 May 2009 <http://www.apple.com/environment/>.

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