Session #5
Strategic
Management
Dr. Mark H. Mortensen
Session 211 and 212
M-W PA 407
(c) Copyright 2011 Mortensen Consulting Group LLC
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You Will be Prepared for Today
Iff You:
Have read Chapter 3
 Have read the Apple case study
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Key Points from Last Session

Chapter 2
of Directors – purpose & responsibilities
 SOX effect on operations
 Current trends in corporate governance
 Importance of Executive Leadership, even in a
“learning organization.”
 Board

Case Study Methodology
 Purpose
of a Case Study
 Outline of a Case Study
 Procedure for Doing a Case Study
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Chapter 3
Lecture & Discussion
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Apple Case Study
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Apple Case Study: Outline
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Case Study Background – The nature of
competitive advantages over time in highly
competitive, innovative industries.
What should Apple do?
 Define
the Central Issues
 Define the firm’s goals
 Identify the constraints
 Identify the alternatives
 Select the best alternative
 Develop an implementation plan
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Apple: Case Study Background(1):
Apple History
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Competitive advantages in the 1980s made
Apple the most profitable PC company in the
world (What were they?)
But “on a glide path to history” (What? Why?)
Four successive CEOs (Sculley, Spindler,
Amelio and Jobs) sought to reposition Apple in
the PC Industry and to create a sustainable
competitive advantage.
(What did they try? What succeeded? What did
they decide not to do?)
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Competitive advantages in the 1980s that made
Apple the most profitable PC company in the world
Ease of use
 Dominance in creative industries (design,
desktop publishing), as well as education
 Buyer loyalty
 Proprietary operating system
 Strong branding
 Excellent industrial design

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Why was Apple “on a glide path to
history”

Low market share, increasing competition
and change in the market to a
commodities point of view for PCs put
Apple’s differentiation strategy at risk.
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CEOs’ Strategies
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Sculley – low-cost producer; “hit products” every 6-12
months; Mac Classic vs. IBM clones; Powerbook laptop;
Newton PDA; Taligent with IBM for new OS; PowerPC
chips from IBM
Spindler (1993-1996) – reinvigorate core markets; killed
Intel chip; licensed Mac OS to clone makers; killed
Taligent; layoffs
Amelio (1996-1997) – servers & other high-margin
devices; cancelled nextgen Mac OS; ended licensing
program; bought NeXT (Jobs)
Jobs – iMac; outsourced manufacturing; direct sales via
website; image; industrial design
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Apple: Case Study Background(2):
The Mac Business in the 21st Century

Technology & Innovation
 Cutting
edge experience
 High-end
 Differentiated from Wintel machines
 Intel Chipset
 Overhauled Mac OS X in 2001 (UNIX)
 Proprietary Apple-developed applications

Distribution & Sales
 Retail
stores
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Apple: Case Study Background(3):
The Evolving PC Industry
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The dynamics of the PC industry have radically
changed in the last 20 years.
Buyers
Rivalry among suppliers
Barriers to entry
Complements to the PC industry
Supplier vs. Manufacturers balance of power
Substitutes
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Apple: Case Study Background(4):
Apple Beyond Macintosh
iPod
 iTunes
 Apple TV
 iPhone
 iPad
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Questions for next week – think
about these and we will discuss

Has Steve Jobs finally solved Apple’s
long-standing problems
With respect to the Macintosh business?
b. With respect to its broader strategic position?
a.

Going forward, what should Steve Jobs
do?
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Apple’s Long-Standing Problems
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Apple SWOT(s)
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Apple’s Goals
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Apple’s Constraints
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Apple’s Alternatives
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Apple’s Best Alternatives
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Apple’s Implementation Plan
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Reminder for Next Class
Nothing due.
 We will continue our discussion of
business ethics and have a review session
for the upcoming quiz.
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