Category winner: Apple Inc. in 2012

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This case won the Strategy and General Management category at The Case Centre Awards and Competitions 2015.
 
The case

What

Apple Inc. was founded as ‘Apple Computer’ and was best known for its Macintosh personal computers in the 1980s and 1990s. Starting in the late 1990s, Steve Jobs transformed Apple Computer into Apple Inc. with innovative non-PC mobile device products. By 2012, Apple was the most valuable company in the world.

Why

Steve Jobs

Steve Jobs tragically died in 2011. The recently retired CEO of Apple Inc. was a legend and had long been thought of as the ‘soul’ of the company. The new CEO, Tim Cook, now faced an extraordinary challenge: to sustain the success achieved under Jobs while also taking Apple to the next level.

When

Steve Jobs and Steve Wozniak, both college dropouts, founded Apple Computer in 1976. The release of Apple II in 1978 sparked a computing revolution that drove the PC industry to $1 billion annual sales in under three years. Apple quickly became the market leader, selling more than 100,000 Apple IIs by the end of 1980.

However, despite a strong brand, rapid growth, and high profits in the late 1980s, Apple was almost bankrupt by 1996. Jobs, who had been forced out of the company in 1985, rejoined in 1996 as a part-time adviser and then became its interim CEO in 1997. He changed Apple from a company on the verge of bankruptcy to one of the largest and most profitable companies in the world.

Where

The two Steves initially worked in the Job's family garage at their home in California, US. Apple Inc. is now a global company based in Cupertino, California.

Key quote

‘I would highly prefer to settle versus battle (re. intellectual property rights), but the key thing is that it’s very important that Apple not become the developer for the world.’ – Tim Cook, CEO, Apple Inc.

What next?

In the first six months of Cook’s tenure, the business performed well and the board awarded Cook one of the largest compensation packages ever: almost $400 million in stock. Cook was in a great position to make his own distinctive mark on the business, but how?

 
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Apple Inc. in 2012
Ref 9-712-490
Teaching note
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Spanish language version
Ref 9-713-S04
Portuguese language version
Ref 9-714-P01

The authors

David Yoffie

David B. Yoffie and Penelope Rossano David explains how cases about unique companies such as Apple Inc. can reveal lessons for a wide range of companies across various industries.

Filling a gap

Apple has remained an object of fascination for faculty and students alike for more than 20 years. This case enables a discussion of Apple’s early success with the iPad, which is missing from earlier cases.

Researching the case

I focused the research for the case on key teaching lessons, including the sources of competitive advantage, industry analysis and positioning, sustaining competitive advantage over time, and the management challenges of replacing a superstar CEO (Steve Jobs, who died in 2011).

Common problems

BankruptcyWhile Apple is unique, it has faced problems common across many industries and companies. 

For example, in the summary, I tell students that superior products alone do not equate to competitive advantage: Apple almost went bankrupt in the mid-1990s with a superior product. It took a new strategy to create an entirely new value chain and ecosystem to build the Apple we know today.

Teaching approaches

I have two very different teaching plans for this case, depending on when it will be used on a course.

Steve JobsIf used early in a strategy course, I start by exploring Apple’s competitive advantages and then dive into the PC industry analysis.

However, when the case is taught later in a strategy course, I drop the industry analysis discussion and go directly from competitive advantage to the analysis of why Apple almost failed before Steve Jobs’ return. 

David also won the Overall Winner Award with Cola Wars Continue: Coke and Pepsi in 2010, co-written with Renee Kim.

About the authors

David B. Yoffie is the Max and Doris Starr Professor of International Business Administration at Harvard Business School.

tw @dyoffie

Penelope Rossano is a Research Associate at Harvard Business School.
penny@post.harvard.edu

 

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