Case study analysis on Steve Jobs (Subject : Business acumen)

Q1. What lessons can You draw from Steve Job’s Professional Life at Apple/ Pixar on Business Acumen.

Apple computer formed in 1976

Apple cofounded by Steve Jobs in 1976, was an organisation heavily focussed on design, creativity and innovation as a culture.? Hence leaning towards the cultural school of management. Being in the High end Technology industry, Steve Jobs was convinced he would have to introduce new products in the personal computer industry and smartphones segment with great agility. He wanted Apple’s strategy to reflect the culture of the organisation that was innovation driven.

At Apple Mike Markkula Jr. was responsible for attracting venture capital. Wozniak was a technical genius making technology easy to use and affordable reaching out to a larger consumer base and Steve Jobs was obsessed with design

1978 – Apple II was launched : Steve Jobs was able to recognize a viable business opportunity. Apple II created a computer revolution that drove the PC industry to 1 billion in annual sales in less than 3 years indicating the first signs of an enduring organisation featuring in the top quintile of the Mckenzie curve

1980 – Apple III introduced and failed.

Steve Jobs was a charismatic Leader with high degree of mental intutition.he ensured that the process of failing had to be quick , lessons learnt and concerned teams had to move on to the next Big Idea. As is the case of Apple III, Lisa’s failure and Mackintosh slow sales offtake in the market . Infact he disagreed with John Skulley and wanted to de-emphasize Apple’s cash cow – Apple II, lower the prices of Macintosh, increase ad spends which Skulley did not approve of strategically and took it to the Board. He felt that Steve Jobs could lead Apple to failure incase this strategy was adopted and the Technology industry was not ready for such a strong move. ?This is clearly a disadvantage among entrepreneurs and the entrepreneutrial school of thinking !

Steve Jobs was focussed on driving strategy at Apple and in Pixar in a holistic manner in order to achieve superior economic performance on a sustained basis .

PIXAR ANIMATION COMPANY

Pixar was a content driven fledging studio.? Job can be credited for creating a Seismic shift at Pixar. At Pixar his strategic principles aligned with that of the Power school of strategic management. The outcome of negotiation between Smith & Jobs became divisive and ugly .Steve Jobs was able to move ahead crossing all hurdles and hence between Smith and Jobs, Jobs survived . Jobs can be credited with the fact that he was able to take critical decisions at the right time. There were widespread layoffs at Pixar . Strategic pivot came from Talent at Pixar. Catmull & Lasseter encouraged? a warm and open culture.

Linda Hill from Harvard after running successful Innovation sessions at Pixar concluded very talented and intelligent employees at high positions work in Pixar.Hence Psychological safety needed to be created by Leaders so that participants can create an environment that will foster innovation.

Stakeholder management : As part of Strategy at Pixar Steve Jobs started analysing ?people who are stakeholders, their perspectives and interest. Steve Jobs was unable to influence the creative process at Pixar and instead he and CFO Levy ( appointed by? Jobs ) learnt everything about dynamics and economics of the animation business.

He negotiated a new contract with Disney by which in the next 10 years , 5 movies would be made . Disney and Pixar would split profits 50/50 in a marketing and distribution deal.

In November 1995 Toy story released. Pixar went Public and Jobs became a billionaire. In 2006 Walt Disney bought PIXAR for $ 7.4 bn, thus increasing shareholder value

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2.Jobs told his biographer that his most important creation was not any single product but making an enduring company. In your opinion did he succeed.

In order to make an enduring company wherever Steve Jobs went he pursued strategy holistically. Along the way he helped to transform seven industries: personal computing, animated movies, music, phones, tablet computing, retail stores, and digital publishing.?

As Michael Porter has laid down the principles of strategy and the same was followed by Steve Jobs , he wanted to distinguish Apple from its competitors by making choices that are Long term and would lead to an established and ?enduring organisation

In 1981- IBM entered the American market. The IBM PC was an open system that other computer manufacturers could copy. .Hence, ?Apple was into vertical and horizontal integration the products had sleek designs which were a result of Steve Job’s obsession with Innovation and design and as was the practise in industry refused to license its products to third party bidders .Steve Jobs refused to be reactive to fierce competition from Intel

1982 – Apple’s revenues continued to grow, market share dropped to 6.2%

1984 – Macintosh introduced into the market. Mac was incompatible with IBM Machines, had many innovative features of the Lisa and sold at a lower price. In this scenario Steve Jobs did not follow conventional strategy or business model because he did not want the Macintosh to be commoditised since commodity meant having no Leadership in the market place according to Arnoldo Hax. Players in the technology world could not afford to follow conventional strategy models ?to achieve sustainable competitive advantage. Instead ?Arnoldo Hax believed in customer segmentation this reflected very clearly in Steve Job’s strategic execution which is a lesson in Business acumen

Steve Jobs was personally responsible for recruiting John Skulley who worked with Apple for 10 years. Jobs was very excited to learn that Pepsi had overtaken Coke as the best cola beverage brand in America for a short period of time and requested Skulley to teach him experience marketing in order to launch Mackintosh. Within that time Skulley made Apple the most profitable computer company in 1992 , the largest selling hardware PC in the world .

Source : John Sculley, Legendary CEO, Apple, Pepsi-Cola Co. – Wharton Leadership Lecture.

https://youtu.be/VtvjbmoDx-I - Experience Marketing introduced by Skulley at Apple

When Jobs returned to Apple as CEO in 1995 he was very focussed ensuring that Apple would have the narrowest product lines. Tim Cook helped Jobs streamline supply chain and increased spending on R&D. Being innovative and knowing what the consumer required even before they themselves knew it would give Apple the edge in the Technology industry.

Endurance was created by Jobs? by the end of 1980, Apple became industry leader selling more than 100,000 Apple 2 computers. Even though sales offtake of Macintosh was not great it was received as a premium product by consumers giving Apple a Leadership position in the market. With the introduction of I mac in 1998 Apple posted a profit of $309mn. Jobs persisted to make Apple more relevant by introducing? the new operating system in 2001,. The shift to Intel chips also helped to improve speed of the Laptops made by Apple. Range of new products ipod , iphone and ipad were introduced in the next decade.I phone was introduced in 2007, created a mass market for smart phones. All these innovations make Steve Jobs also follow the Cognitive school of? Management where Strategy is a cognitive and creative process.

APPLE CELL PHONE In 2011 – quarter 3 , Apple generated more than 50% of the cell phone industry’s total profits . Apple released an upgraded I- phone every 12 -15 months through rapid innovation. With respect to the Mckenzie curve Apple & Samsung earned virtually all the economic profit being in the top quintile of the curve while the other mobile phone manufacturers in aggregate actually destroyed value. Those companies in the top quintile averages as much as 30 times as much as economic profit.

AMAZON PHONE (2014)- competition analysis

When Jeff Bezos was launching the Amazon Phone he ensured that it was high end product like Apple. Again like Arnoldo Hax believes he did not want to invest in a product that would soon become utilitarian in nature and compromise on Amazon’s capability of taking a Leadership position in the market. Like the Apple phone he wanted to position the phone as a Lifestyle product fulfilling customer aspirations and users even consider these brands as ‘’cool.”

According to Bezos “Risk taking is cool. Thinking big is cool. The unexpected is cool.

Close-following is not cool.”

The high-end phone would be big, risky, different, and unexpected—not the cheap, unexciting device everyone would anticipate from Amazon. That is why Bezos ordered the team to work on the phone’s Firefly feature, a service that can identify many types of products including a jar of Nutella and media with the click of a button

Bezos unveiled the Fire Phone on June 18, 2014, at Seattle’s Fremont Studios. On stage, he praised the phone’s design and Dynamic Perspective, and showed off ?how Firefly could identify a painting by Renaissance artist Vittore Carpaccio. However this phone did not do well and while Jeff Bezos was reacting to competition and following Environmental school of Thinking , Steve Jobs would rather work with Microsoft and secured $150 million investement from Bill gates when he went back to Apple .

?Reference: https://www.fastcompany.com/3039887/under-fire ( Amazon ).

3) If You were Steve Job’s personal business acumen assistant what else would you have recommended Jobs to do on business acumen

By the time Steve Jobs died, in October 2011,he had built it into the world’s most valuable company. The original I phone was launched in USA in January 2007.

In 2010 Apple I phone 4 was widely used by Indians and I would advise Steve Jobs to manufacture 30% of I phone products ?in India as part of the 5 year brand marketing plans for Apple I phones . ?Till then I would also encourage Apple Team ?to make ?all the new launches of I phone simultaneously available to customers in India .

In 2011, the retail division of Apple had 517 stores in 25 countries , out of which 43 stores are in China. Apple?did not have any company-owned?stores?in?India The company distributes product in?India?through resellers. Apple started manufacturing IPhones in India as late as 2017 with the I phone SE and currently produces IPhones 11 , 12 and now 13 to cater to the Indian market after Tim Cook came and met the Indian Government.

As per market research data i by 2017 a third of the global population have started using a smart phone.

Apple has 3 contract manufacturers in India - Foxconn, Wistron, Pegatron . Pegatron will start making I -phone 12 in India starting in April 2022.

?Apple India spokesperson has announced that ?flagship brand IPhone 13 will be produced at Foxconn – Chennai . India is the second largest smartphone market in the world and will grow in market share to record levels This will improve costs and supply chain efficiencies.

AS a result Apple will see 7 million shipments , achieving 5.5% market share from the current MS of 1%. Xiaomi owns 27% and Samsung owns 22% of smartphone market share in India. ?OnePlus is selling flagship smartphones in India at the cheapest rates.

Hence, people tend to buy OnePlus instead of iPhones. Another suggestion to the Apple team they need to manufacture in India a budget smart phone catering to the price conscious Indian consumer.

Apple will become the 2nd. Largest brand exporter after Samsung ! Apples revenue around $ 2.09 bn in 2021 is more than Samsungs !

In 2022 , Apple hopes to cut time lag between launch and local production of latest I-phone? in India to 6 months !

According to Real Investment firm CBRE, India will witness 25% jump in New store openings in 2022. Lastly in India,? Apple can open big premium stores in High Street and Malls

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