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CIEE Study Center in Palma de Mallorca Entrepreneurship and Innovation Course Pere Joan Ribas Barceló [email protected] Apple: Management mistakes

Apple 03 - Management Mistakes

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! ! CIEE Study Center in Palma de Mallorca Entrepreneurship and Innovation Course Pere Joan Ribas Barcel [email protected] Apple: Management mistakes In 1979, Steve Jobs went to visit the Xerox Palo Alto Research Center (PARC) situated in Silicon Valley. At that Dme they were developing several products that could have turn Xerox into the IBM of the 80s or the MicrosoM of the 90s. 1. Network of Computers (100 computers) connected sending emails. 2. Graphic user interface (No code, no type). 3. Prototype mouse (They did not invented, it had been there for 15 years. PARC only improve it). In 1981, one year a-er Apple went public, IBM launched the IBM PC. IBM was 40 Ames bigger than Apple when they decided to come into the personal computers market. The rst IBM PC was not good. However, they managed to survive because they have involved many stakeholders in the process. Many companies were interested in the success of IBM products but at the same Ame, many companies were working in parallel and therefore, the innovaAon product cycle was faster than Apples which was doing almost everything in-house. Apple (Steve Jobs) wanted to keep control over all so-ware developed for Mac (in-house development). Microso- (Bill Gates) wanted to develop so-ware for both IBM PC and Apple. When developing the Macintosh, Jobs wanted to be the rst PC with icons on the screen. However, Gates announced the Windows One for PC one year earlier. CompeAtors Management: PepsiCo CEO Steve Jobs was 30 years old and had no skills or experience to become Apples CEO. He lacked the discipline and temperament needed to run Apple on a daily basis. Apple hired PepsiCo CEO, John Scuelly, President of PepsiCo (1977-1983). Jobs wanted Sculley to apply his markeDng skills to the personal computer market. Steve Jobs successfully sealed the deal aMer he made his legendary pitch to John: "Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world? Market Mistakes MARKET RESEARCH - PRICING: Apples computer Lisa was a market disaster. The product was not overpriced, but the selling price was clearly above of what potenDal customers where willing to pay for a computer. In that Dme they were not too many compeDtors, not to many opDons in the market but customers preferred to buy less expensive computers. Complementary products Desktop printers INNOVATION: Xerox was working on a printer device. Apple also had an internal project but the device produced in that garage was far beaer than both companies were producing. Apple decided to invest in that company and produced the rst Laser printer of the market. The printer was expensive (7000$) however, it was a network printer. Meaning that for the rst Dme it was possible to share the printer in the oce. A a rst entrant Apple become the market leader in this segment. Leadership: Macintosh LEADERSHIP: Jobs took the leadership to lead a small team, within apple, to build the Macintosh. He reinvented manufacture process (in Japan), the markeDng approach and the distribuDon system. CUSTOMER ORIENTED: The Macintosh was the rst computer that was intuiDve. PROJECT MANAGEMENT: Steve Jobs thought that it would take a year to built it. In fact it took 3 years. Macintosh cost $2.500, $1.000 dollars more than an average PC. Internal problems John Scuelly, joined Apple in 1983, from Pepsi-Co where he was the CEO. At Apple, Scuelly focused on MarkeDng and sales (as in the sodas industry) while the most important factor at that Dme was the improvement of the product. Steve Jobs had a completely opposite vision. Jobs wanted to focus on the product characterisDcs and therefore, internal fricDons aroused from these two dierent strategic approaches. The company had grown and was divided in several divisions with no or low communicaDon. At the same Dme, in the late 84 the computers industry felt into recession. Macintosh sales did not match with the expected sales. In 1985, the company started to have loses. Apple had a lack of Leadership. Due to internal problems, John Scuelly asked the BoD to re Steve Jobs. Steve Jobs leaves apple End of chapter two Bibliography Inside Apple, Adam Lashinsky (2012) Steve Jobs, Karen Blumenthal (2012) The Apple Experience, Carmine Gallo (2012) Steve Jobs: Ten Lessons in Leadership (2012) Steve Jobs, Walter Isaacson, (2011) Steve Jobs: RevoluDonary, Chris Anderson (2011) The innovaDon Secrets of Steve Jobs (2010) Apple CondenDal 2.0, Owen Linzmayer (2004) Jony Ive: The Genius Behind Apple's Greatest Products (2014) Videos Steve Jobs: How to live before you die Entrepreneurs (1986), TV Documentary Steve Jobs The Lost Interview (2012), Documentary Steve Jobs: One Last Thing (2011), Documentary Steve Jobs: Billion Dollar Hippy, BBC Documentary Steve Jobs and Bill Gates Together in 2007 at D5 Interview: Steve Jobs in 2010 at D8 Internet companies series!