Adrian Johnson, Melissa Lawrence,
Justin Littledike, Beth Martineau, and
Matt Meservy
David F. Coelho
Management 3500-001
July 22, 2008
Apple Inc.
Beginning in 1976, but really exploding over the last decade, Apple Inc. has become a
well-respected, well recognized, and profitable company. By looking at the many facets of the
company we are able to see what made this a competitive, successful, and thriving company
today. According to Apple’s mission statement, “Apple ignited the personal computer revolution
in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the
Macintosh. Apple is committed to bringing the best personal computing experience to students,
educators, creative professionals and consumers around the world through its innovative
hardware, software and Internet offerings.” This mission statement clearly shows that this is a
company that wants to grow and compete in this technological market.
Steven Jobs and Steve Wozniak founded the Apple Company in 1976. The company went
through a series of successes and failures. Steve Jobs was pushed out of the company in 1985
then returned in 1997; with his return Apple really started to kick it into gear and take off. Stocks
raised, products were made and the company overall became a success.
This success has come to Apple with its continued innovation by manufacturing and
selling all kinds of consumer electronic devices. Early on Apple Company only sold computers. In
2001 it changed its name from Apple Company to Apple Inc. and expanded the size of its
products. Today Apple Inc. has a full series of computers, phones, portable media players,
software and more. This change shows the innovation that this company possesses in looking to
the future and trying to curb what the consumers will buy.
Then came the development of the iTunes system, which made music, television, movies,
music videos, radio, books, and games readily available for any of these products, all while
bringing in a huge profit. Apple intelligently made iTunes compatible with their own Mac OS X
software and the competitive Microsoft software, Windows.
Apple Inc. has two main headquarters in the United States; the main hub is in the heart of
Silicon Valley in Cupertino, California. At this location Apple focuses on Engineering,
Marketing, Sales, Legal, Human Resources, and AppleCare. The other location is in Austin Texas
and is similar in design as the Silicon Valley, but focuses only on Operations, Sales, and
AppleCare.
Apple also expanded internationally and houses a location in Ireland that handles
European Telesales, European Apple Store Support, Manufacturing, AppleCare, European
Technical Support, Finance, Operations, Information Services and Technology, and Human
Resources. These divisions employ a great diversity of people with the ability to support
customers from many different countries in their native languages.
Besides the different headquarters Apple has over 200 Retail Stores. Apple has made
these more than just a store however; they are really more of a place to hang out with like-minded
individuals and a place to have fun. This is also where all of the one-on-one training occurs, as
well as the workshops to help those individuals who may be slightly intimidated by the new and
different operating styles of Apple. Though Apple does make them a friendly and fun place to
hang out of course that is where a lot of their products are sold.
As consumers we look for the very best affordable products out there. In a way the product
almost has to sell its self with the help of some very creative marketing. When buying a product
some of the key factors people look for before making a decision include:
1)
2)
3)
4)
Quality/innovation,
Design,
Service, and
Price.
It is these four key factors that we use to make our decision about which product to buy and
from which company. However, it is usually hard to find a product that meets every consumers
needs. Finding all four of these factors in one company or products can often be difficult. As a
company, Apple has used these 4 qualities to get ahead of its competitors, as all of the products
they offer are ahead of the curve.
As Apple continues to grow so does its line of products it has to offer. Apple seems to have
electronic gadgets and services that meet every consumers needs. Their products range from
computers, to phones, to audio players, and they even have an online store. Some of the most
popular products include the iMac that starts as low as $1,199, the MacBook Air which starts at
$1,799, the iPod Classic, the Nano, and the Shuffle that range from $40-$350. The iPhone came
out about a year ago at a whopping $499, but has since come out with the new 3G that is twice as
fast and half the cost. Apple TV is another product sold, though it doesn’t quite sell as much as
any of the other products.
There is also a whole line of software and other products available for use with these
computers. These products are exclusive to Apple, which can be considered both a weakness and
strength for the company. The strong aspect of it is that it forces use of Apple software on Apple
products increasing sales for Apple. The weak aspect is that that could be a discouraging factor to
one who is used to programs on the PC and would like to switch to Mac, especially when they are
used to certain programs on the PC.
In 2006 Apple Inc. reported employing 17,787 fulltime and 2,399 temporary employees.
These employees are included in the following departments: Mac Hardware Engineering,
Software Engineering, Applications, iPod Engineering, Marketing, Sales, Operations, Information
Systems and Technology, Legal, Human Resources, AppleCare, Finance, and Retail.
Apple Inc. offers each employee health, disability, and life insurance through a program
called Flexible benefits. Through this program Apple employees are given FlexDollars to
purchase basic benefits or have the option to allocate the money in a different department.
Employees are also offered other benefits including 401(k) plans, stock options, financial
education and apple-health fitness program.
Newly graduated students have a chance to work at Apple Inc. through their New Grad.
Employment Opportunity. This program offers graduates who have limited or no job experience
the opportunity to apply. Apple Inc. is looking for people with “sharp intellect, a top-notch
educational background, and the energy to move the industry forward.”
The work culture at Apple is very laid back. Managers usually set work schedules, which
vary by department. In some cases, employees come and go as they please. Telecommuting also
is allowed with management approval.
One senior hardware engineer, who worked in Cupertino from late 1999 to the end of
2004, said he was "surrounded by a lot of energetic people and experienced no end to challenges
and cool projects, however, there was no end to the hours.”
Apple's corporate culture resembles other very successful companies founded in the
1970s, those that bucked tradition in terms of organizational hierarchy. It compares Apple to
Southwest Airlines and Microsoft with an attitude influenced by the company's founders, who
often walked around the office barefoot, even after Apple became a Fortune 500 company.
Apple Inc. marketing campaigns have focused on comparing PC’s and Macs. They have
tried to educate the consumer electronic population about Apple products and the many
differences and improvements from PC’s. The majority of their campaign ads have been geared to
a younger generation using pop culture music and flashy visuals.
Some of Apple Inc.’s most famous campaigns have been the “Think different” campaign,
which was launched in 1997 after Steve Jobs returned. On June 10, 2002 Apple introduced the
“Switch” campaign. It featured what the company referred to as “real people” who had
“switched” from Microsoft windows platform to a Mac. In 2006 Apple then introduced “Get a
Mac” campaign. This is the most well known add which shows two men, one representing a Mac
and one representing a PC. This campaign is shown in the US, Canada, Australia, New Zealand,
United Kingdom, and Japan. Both the Switch and Get a Mac adds were introduced by Jobs
during a shareholders meeting the week before they were aired. Get a Mac campaign coincided
with a change of signage and employee apparel at the Apple retail stores detailing reasons to
switch to Macs.
This company has come a long ways since the Lisa and they have managed to make a
large footprint, not only in the world of computer science, but also in the world of communication
data distribution as a whole. They have wide consumer base constituting their horizontal sales
strategy. This means that they do not just market to large corporate accounts for fast and easy
money, in fact not one individual consumer accounted for over 10% of their income in 2007. This
ensures that they have not “put all thier eggs in one basket” so to speak and therefore have
secured this customer base for the future. Apple’s main consumers consist of individuals
interested in education, creative professionals, business markets, and private individuals.
Their stocks have skyrocketed since the iPod’s release and it seems to just keep climbing.
In the ending quarter of 2007 Apple sold over 22 million iPods and 2.3 million computers. Their
revenue grew over 35% just within that year. With the release of their iPhone in 2007, through the
distribution of AT&T, Apple sold one million products in the U.S. in just 74 days. Not to be
outdone by its prior application the new 3G iPhone released July 11, 208 hit the same one million
milestone in just 3 days.
In the world of Apple, Inc. all product and research development, licensing and software
is handled under the watchful eyes of the Corporate Headquarters Administration. This
proprietary knowledge is how Apple, Inc. functions from the top on down. Unlike other
companies, there are no branch offices with access to equipment, downloads, software or
documents, there is only the corporate hubs. This ensures the company’s control over its growth
and development. This is called a Proprietary Business Model, one that is used in many software
development companies to keep their cutting edge ideas from leaking out to the public.
In his May 3, 2001 address to The New York University Stern School of Business,
Microsoft Senior Vice President, Craig Mundie, emphasized the importance of the "research and
development model" in creating a sustainable business: “...This research and development model
… based on the importance of intellectual property rights [was the] foundation in law that made it
possible for companies to raise capital, take risks, focus on the long term, and create sustainable
business models…. [A]n economic model that protects intellectual property and a business model
that recoups research and development costs have shown repeatedly that they can create
impressive economic benefits and distribute them very broadly."
Overall, we found Apple Inc. to be a very interesting company to look into, especially
since it has become such a dominant company in the markets today. Their innovations, new
technology, appealing merchandise, and catchy marketing campaigns make for an extremely
interesting company to learn more about. As well as looking at the success of the company, we
are also interested in looking at some of the potential failures of the company that could have a
real affect in the future.
After all of our research and efforts we there are a few recommendations that we feel
would keep Apple at this competitive level and innovation. One major problem that Mac users are
constantly faced with is compatibility with PC’s. PC’s still hold about 90% of the computer use.
It would be very helpful and beneficial if Apple could find a way to continue make the process of
linking with PC’s easier. Along those same lines there are numerous products that are available to
PC users and not to Mac users, which can get frustrating, especially with Microsoft Office. A lot
of the templates available on PC’s are not available on Macs. Though Apple did create the iPod
first and it is very easy to use and reliable the Zune has found one feature that the iPod doesn’t
come with that that is the radio. Apple would do well to include this feature, since apparently it
isn’t that difficult. By taking some of these small steps the satisfaction with Apple products would
continue to be high and Apple can stay ahead of the technological curve.