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The Case Centre’s top 40 bestselling cases

Seventeenth place - Apple Computer 1992
The case
Case: Apple Computer 1992 Shouldice Hospital Ltd.
Authors: David B. Yoffie, Jeff Cohn and David Levy
Institution: Harvard Business School
Ref: 9-792-081
Date published: 1994

Getting to the core of Apple: In 1991, the computer industry had just experienced its worst year in history. Although Apple had continued to outperform its competitors, the intense competition was putting acute pressure on its margins. This case examines Apple's need to retain its profitability as the structure of the industry deteriorated. Apple's CEO asked his staff key questions: Could Apple change the structure of the industry, and if so how? And what were the alternatives?

 
The authors

David B. Yoffie is the Max and Doris Starr Professor of International Business Administration at Harvard Business School.
e dyoffie@hbs.edu

Jeff Cohn and David Levy were Research Associates. 

 
The teacher

Dominic Houlder Dominic Houlder is Adjunct Professor of Strategy and Entrepreneurship at London Business School. Dominic has been using this case every year since 1995, teaching it a total of about 50 times to date.

My colleagues at London Business School (LBS) have been following Apple since the mid-1980s. In the early 1990s, Executive Education at LBS ran a custom leadership programme for Apple Europe and many of the issues featured in Yoffie’s 1992 case were live at the time: I believe that his case featured on the Apple programme soon after its publication. Since then, the case has been a core element of our introductory course Understanding General Management, which runs across all of our post-experience degree programmes and which I helped design.

Cliffhanger moment

The case features Apple at a cliffhanger moment in its evolution and allows for a rich debate between proponents of outside-in versus inside-out approaches to strategy. It highlights the crucial issue of timing in determining a general manager’s (Sculley’s) freedom of action. Unusually, it allows a cross-disciplinary approach to teaching by integrating strategy, organisational behaviour, marketing and accounting. The issues in the case are perennial, and continue to be pertinent to the situation of Apple today – and others wrestling with the scope of their ecosystems.

Interesting reactions

The most interesting reactions I get are from my Executive MBA students who confront comparable issues today. Current twists and turns in Apple’s fortunes greatly influence the debate about Apple’s choices in 1992.

I strongly recommend the case: it works well because it brings together the business challenge and personal challenge facing a leader such as John Sculley. The accompanying video of Sculley in class at Harvard Business School is an essential element of the teaching plan. 

 
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