Industry Analysis Report: Apple's Rise and Fall and Rise Again

This report provides an in-depth industry analysis of Apple, tracing its evolution from its initial public offering in 1980 to its transformation under Steve Jobs. It examines the challenges Apple faced, including competition from IBM and Microsoft, and the strategic missteps of CEOs before Jobs. The analysis details the initiatives of Sculley, Spindler, and Amelio and their failures, contrasting them with Jobs' decisive actions, such as securing Microsoft investment, halting Macintosh licensing, and streamlining the supply chain. The report highlights Jobs' focus on innovation, secrecy, and marketing, which led to Apple's resurgence and its establishment as an industry leader. The report emphasizes the importance of effective leadership and decision-making in navigating market challenges and achieving sustainable success. This analysis focuses on Apple's strategic shifts, leadership impacts, and market dynamics.

Running head: INDUSTRY ANALYSIS
Industry Analysis
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1INDUSTRY ANALYSIS
1.
Apple is one of the leading brands in the IT industry. The launch of the i-phone and i-pad
created revolution in the technological world. This leader of the market witnessed considerable
decline in the PC industry, with the changes in the 1980s and mid 1990s. The year 1980 marked
an important phase in the history of Apple, as the first successful initial public opening (IPO),
was launched in December 1980. The leading position of Apple found an obstruction, as IBM
entered the market of the personal computers (PC). The PCs designed by IBM used the DOS
operating system of Microsoft, and the microprocessor of Intel, for their PCs. The operating
system was an open one, and could be cloned by other companies. However, Apple practiced
horizontal and vertical integration, and relied on the operating systems and processors developed
by their in-house teams. Though the operating system developed by Apple, Macintosh gained
popularity initially, however, the lack of speed of the processor, and lack of compatible software
made Apple, loses their business to IBM. The net income of Apple fell by 62% between the
years 1981 and 1984. During the years 1985 to 1993, with the newly recruited executive John
Sculley, the new markets for the PC were sought. The PCs of Apple were driven by superior
software. Apple, during this time grabbed more than half of the PC market, thus enhancing the
sale of Apple. The company thus made considerable profit. Sculley went into alliance with IBM,
with joint ventures on creating new PC OS and multimedia applications. It was also decided that
Intel would clone the Mac processors, thus speeding up the processors. However, even with such
efforts, the margin of Apple dropped to 34%. With this failure, Michael Spindler replaced John
Sculley. Spindler disallowed the Mac OS on the Intel chips. By the year 1995, the alliance
between IBM and Apple was broken. Even after an investment of $500, none of the companies
wanted to switch to the new technologies. After the loss, in 1996, Gilbert Amelio was approinetd

2INDUSTRY ANALYSIS
as the CEO. He announced the acquisition of NeXT Software. Even with such efforts to revive
the business, Apple lost $ 1.6 billion under Amelio.
2.
a. The initiatives taken by Sculley, Sindler and Amelio were directed towards the revival of
the business of Apple. The initiatives taken by these CEOs from the period of 1985 to 1997
failed. This failure could be seen as the lack of foresight and use of the most appropriate strategy
at the right time. While most of the CEOs before Steve Jobs focused on the expansion in the
variety of the products, rather than focusing on narrowing the product lines and focusing on the
development of the existing products. Moreover, the CEOs, before Steve, failed to identify the
actual issues, thus beating around the bush, with temporary success and effectiveness. The lack
of effective decision-making and the fear of taking risks could be cited as the cause of failure of
the retrieval of Apple.
b. Steve Jobs reacted sharply and took bold decisions for the retrieval of Apple. He was able
to identify the exact areas where the issue lies. Jobs announced that Microsoft would invest $150
million in Apple, thus developing core products that were compatible with Macintosh. Moreover,
Jobs halted the Macintosh licensing programs. More than 99% of the users of Mac were using
the clone of the software, thus affecting the profit of Apple. Moreover, Apple also started their
own website for the direct sales, thus streamlining the supply chain of the company. Steve Jobs
also brought in a new culture in the company. He shifted the focus from expansion of the
products to narrowing down and focusing of the existing products. He also focused on
incorporation of innovation. Steve Jobs practiced high secrecy. Dummy recruitment positions
were also created, where the newly recruited employees worked, before they gained the trust of
the CEO. The employees were well aware that under their new CEO, violation of confidentiality

3INDUSTRY ANALYSIS
was a strong ground for termination. He also focused on promotional and marketing activities,
with attractive tag lines and advertisements that would attract more customers. Thus, with the
initiatives of Steve Jobs, Apple was successful to gain an invincible position, as a leader. The
risks that Steve Jobs took for Apple and the capability of identifying the actual issue made him
succeed to help in the survival of Apple. The leadership qualities and the decision-making
capabilities that he possessed are rare and thus was able to take the appropriate decision, needed
to ensure the retrieval of Apple.