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Apple Computer Corporate and Business Strategy
two major forces that have affected market share loss are the misconception that Apple computers are incompatible with available software for Wintel machines and buying one will result in losses in functionality. This can be overcome with aggressive marketing campaigns in which Apple has demonstrated value added competencies. The second major factor contributing to Apple loss in market share is the unmatched price erosion from the PC market. Apple has failed to narrow the gap because of its operational inefficiencies. If Apple can narrow this price gap and overcome the negative software perception, it will undoubtedly regain market share.
Internal Analysis
Mission, Long-Range Objectives, Current Strategy, and Performance
Between the years of 1980 and 2001, Apple slid along a turbulent slope of declining market share and profit erosion where it lost its leadership position and now lags as a market follower with a mere 3% total market share. (See Exhibit 1.) Apple’s inability to defend its market share and leadership status can be directly attributed to one general, yet prevailing driver. Throughout this fleeting tenure, Apple lacked a clear mission and competitive strategy that drove the value creating activities of the firm.
Between these years, Apple morphed itself between alternating cost leadership and premium priced differentiation strategies. Four CEO’s took the helm between this time and each brought with them a compelling strategy for the company. Strategy links people and cross functional departments to an overall goal, or vision. However, without a consistent vision and an accompanying roadmap, a company looses sight on how it is creating value. When a company fails to understand its competencies and value creating processes, it looses the continual ability to innovate, improve, and learn.
Apple began with the mission to “change the world through technology.” More specifically, the company sought out to make the personal computer an accessible and affordable device to the mass market. The proliferation of new software and hardware technology drastically changed the landscape of the industry and Apple evolved into a leader in desktop publishing. The crucial point not to be overlooked is that the company’s mission did not guide Apple into this differentiating strategy. Rapidly changing industry dynamics dictated Apple’s competitive strategy. In essence, the intended strategy did not develop into the “realized” strategy. In fact, empirical evidence shows us that realized strategy tends to be about 10-30 percent of intended strategy. What really determines strategy is the “patterns of decisions that emerge from individual managers adapting to changing external circumstances and the ways in which the intended strategy was interpreted.” If Apple had decided to be consistent with its vision, it wouldn’t have introduced “Lisa,” an incredibly expensive machine that limited its mass market appeal. Instead, strategy would have focused on cost leadership and the processes that optimized operational efficiencies in order to compete with [next page]