Thursday, March 07, 2002

Hyper-Apple

Now how Steve got the company back from the brink:

1. He focused strongly on bringing cost in line with WinTel PC's. If I remember correctly, he hired away a top manager from Compaq to re-engineer Apple's supply chain (cost reduction).

2. He introduced radically new computers for the home and education markets (iMac). He did this by springing a surprise on competitors (surprise is very important to keep competitors off-balance and stunned, preventing them from regrouping and attacking).

3. He focused on satisfying customers in strong holds like printing and publishing, education, scientific and graphics. He made computers and developed technologies to satisfy this market e.g. beefed up QuickTime, robust AppleScript, cheaper computers for education markets and a dedicated sales force for the education market.

4. Apple's CFO I guess was instructed to start building a war chest for a couple of quarter's worth of losses. The target was $4 billion, as that amount has been stable for the last few quarters in the balance sheet.

How can a company gain advantages in these 4 arenas?

D'Aveni says that there are the new 7 S's

Speed: is related to the churning out of advantage after advantage in each arena. Apple has been regularly churning out product innovations like Airport, Mac OS X, iTunes, iMovie and novel form factors etc.

Strategic Soothsaying: Steve Jobs setting targets to become the center of the Digital Hub is an example of this. Steve or any body else from the company, as far as I know, has not postulated the next aim.

Superior Stakeholder Satisfaction: Satisfying stakeholder is very important. The most important stakeholders are the customers. Apple has obviously been doing very well as they won the best Computer Support Award from ZDNet. The lowliest stakeholders are the shareholders and company executives.

Surprise: Apple has consistently surprised customers and competitors alike by introducing the iMac, Airport, iMovie, Final Cut Pro and lean mean laptops like the iBook and PowerBook G4.

Shift the rules of competition: Apple shifted the rules of competition from MHz and RAM to aesthetics. All Apple computers look beautiful, while the competitors suck.

Signaling Strategic intent: Apple clearly in early 1997 interviews signaled it's intent to provide better products and services to it's customers. When Dell started to make inroads into the education market, Apple signaled it's intent not to lose this market by creating a focused in house sales force, appointing a vice president for educational sales and aggressively providing discounts to education systems around the country to make sales. Recently it went to court to prevent Microsoft from donating used Pc's and its software to schools.

Simultaneous & Strategic thrusts: Apple consistently made multiple thrusts in software, hardware and customer support (Knowledge Base).

http://www.fool.com/community/pod/2002/020305.htm
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