Tactics and Strategy
Investing in Apple – Part Three
This is the last of a three part series of papers produced for the purpose of analyzing Apple Inc.’s business and financial health. As mentioned in the abstract this paper covers three topics; tactical implementation of strategy, business in the face of economic adversity, and Apples human resource strategy. Each of these topics together provides a more literary approach to Apples strategies and achievements. Each of one of these analytic processes provides a sense of insight into the care and thought behind the leadership at Apple. Apple went through two very rough times and each time its leaders learned from their mistakes, emerging as a stronger company. In the 80’s Apple faced certain bankruptcy but with the return of Steve Jobs as their CEO, they were determined to turn their cash position around. Today they are a company almost impervious to recessions and maintain the largest cash reserves of any company in the world. In the Mid 90’s Jobs also had a near death experience and since that time he made sure all senior management would have the capability to take over as CEO if the need arose. That need did arise and Apple is now a stronger company today as a result. To start analyzing this evolution we need to begin by understanding Apple’s strategies.
Tactical Implementation according to Strategic Goals
Apple is one of the leading tacticians in the consumer products industry, and according to Porter’s strategies Apple exemplifies the “Differentiation Strategy” (O. Akan, R. Allen, M. Helms, and S. Spralls III, Critical tactics for implementing Porter’s generic strategies, 2006). The Apple tactics may differentiate from product to product, driven by a wide range of strategies but the vast majority of these actions and sub strategies are driven by a single over-riding strategy that has become the hallmark of Apple. This strategy can be interpreted as “simplifying the user experience” (Wilson Rothman, msnbc.com technolog, October 2011). Steve Wazniak, ‘Waz’, was the brains behind Apple, but it was Steve Jobs that had the vision for the company. “Steve Jobs was one of the best business strategists of our time.” (Martin Lindstrom, Fast Company, October 11th, 2011) It was quite evident that jobs had a very different strategy upon the release of the Apple II. While others predicted that “There is no reason anyone would want a computer in their home” (Ken Olson, CEO Digital Equipment Corp., 1977), Jobs had another vision and if that vision was to come true, simplicity was the key to getting there. Against Waz’s advice, Jobs insisted on an all in one computer with limited ports and connectivity. He enclosed the computer in a sleek plastic casing, a departure from the removable black metallic boxes made by IBM at the time. His tactic of securely encasing the computer was to make it difficult for users to tinker with the hardware because he felt the real target audience should be the less tech savvy office user and eventually home user. His simplification strategy was the birth of the personal computer.
Throughout the years this simplification strategy would drive apple to continually innovate. “We’re gambling on our vision, and we would rather do that than make ‘me too’ products. Let some other companies do that. For us, it’s always the next dream.” (Steve Jobs, Interview, January 24th, 1984) When apple launched its first iPod, Apple’s tactic was to drive simplicity through connectivity. Although it was the bane of many a user, the strategy would go on to change the world of portable music. Again it was Jobs who pushed a single connection point with a simple “Vendor Lock-In” (Wikipedia) tactic, making it easy to purchase music but hard to share that music. Although their simplification strategy went against consumer aspiration, it had the effect of united the music industry and later the movie industry to support Apple as the preferred vendor for content sales. In the end it was the ease of purchasing that resulting in Apple products being benchmarked as the leaders in a wide swath of product categories starting with their mp3 player called the iPod.
Summary of Apples Strategies and Tactics
Apple’s strategy of simplicity can be summed up in a single product, the 2010 Apple iPad. It consisted of a computer with only one button. Once again Apple’s drive for simplicity is displayed in not only the iPod and iPad but also in their iTV, iTunes, and iPhone. Their single over-riding strategy of simplicity has been adopted by a wide variety of products. Apple had countess other sub-strategies which required the implementation of an even wider variety of tactics, but in the end they all paid homage to its general strategy for simplicity. The end goal was to not to make money, according to Jobs, it was to make great products, and profit simply came with the territory. “Life is brief, and then you die, you know? So this is what we’ve chosen to do… It better be worth it.” (Steve Jobs, Fortune, March 7th, 2008).