Case | HBS Case Collection | May 2012 (Revised August 2012)
Apple Inc. in 2012
David B. Yoffie and Penelope Rossano
On October 5, 2011, Steve Jobs tragically died of cancer. The recently retired CEO of Apple Inc. was a legend: he had changed Apple from a company near bankruptcy to one of the largest and most profitable companies in the world. Moreover, he had revolutionized several industries in the process, including music, phones, and computer tablets. This case explores Steve Jobs' successes and the challenges facing his successor, Tim Cook. Could Cook continue to revitalize the Macintosh? With iPod sales declining for four straight years, would Cook be able to continue the iPhone's dominance of smartphones in the face of growing competition from companies such as Google and Samsung? Would Apple's newest creation, the iPad, continue to dominate the tablet market, or would new competitors, ranging from Amazon to Samsung, steal share and drive down profits? And could Apple thrive with Tim Cook rather than Steve Jobs at the helm?
Keywords: competition; market positioning; strategic planning; technology; computer industry; strategy implementation; consumer electronics; telecommunications; Hardware; Innovation and Invention; Competitive Strategy; Leadership; Product Positioning; Telecommunications Industry; Consumer Products Industry; Electronics Industry;
David B. Yoffie and Penelope Rossano David explains how cases about unique companies such as Apple Inc. can reveal lessons for a wide range of companies across various industries.
Filling a gap
Apple has remained an object of fascination for faculty and students alike for more than 20 years. This case enables a discussion of Apple’s early success with the iPad, which is missing from earlier cases.
Researching the case
I focused the research for the case on key teaching lessons, including the sources of competitive advantage, industry analysis and positioning, sustaining competitive advantage over time, and the management challenges of replacing a superstar CEO (Steve Jobs, who died in 2011).
While Apple is unique, it has faced problems common across many industries and companies.
For example, in the summary, I tell students that superior products alone do not equate to competitive advantage: Apple almost went bankrupt in the mid-1990s with a superior product. It took a new strategy to create an entirely new value chain and ecosystem to build the Apple we know today.
I have two very different teaching plans for this case, depending on when it will be used on a course.
If used early in a strategy course, I start by exploring Apple’s competitive advantages and then dive into the PC industry analysis.
However, when the case is taught later in a strategy course, I drop the industry analysis discussion and go directly from competitive advantage to the analysis of why Apple almost failed before Steve Jobs’ return.
David also won the Overall Winner Award with Cola Wars Continue: Coke and Pepsi in 2010, co-written with Renee Kim.
About the authors
David B. Yoffie is the Max and Doris Starr Professor of International Business Administration at Harvard Business School.
Penelope Rossano is a Research Associate at Harvard Business School.