Strategic Scaffolding at Apple Strategic Term Paper

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raster graphics, wire-frame and 3D modeling performance, and refresh rates of their screens. What began to occur in the company's culture as a result of this focus on graphics performance and CPU acceleration was a bifurcation or splitting of product lines. At the high end Apple was gradually turning into a workstation company that could easily challenge Sun Microsystems or Silicon Graphics for supremacy of graphically-based calculations. At the low-end, the company was pursuing an aggressive strategy of dominating special-purpose laptops.

This strategy was entirely predicated on the core metrics of price/performance on hardware defining a culture that put pricing above all else, paradoxically nearly driving the company out of business during this period. The focus on metrics that were meant to purely define the Apple competitive advantage made the company descend into pricing wars with competitors whose business models were much more attuned to pricing competition. The metrics the company had embraced during this time also led to software becoming secondary as these applications could not be measured to the same level of performance and precision as hardware. Tragically the core strength of what would eventually lead Apple to dominate in graphics and in phones, MPs players and tablets was nearly lost due to a myopic focus on metrics on hardware performance alone. The puzzle that Apple was beginning to construct was a reliance on hardware and an inability to create long-term value through intellectual property (IP) which for Apple would have been disastrous over the long-term.

The pattern that began to emerge as a result of this focus on performance as also evident in how the company continued to focus on distribution channels that would eventually further take differentiation from their core products.

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These channels included mass market merchandisers that competed on price and fell into the Windows-Intel (Wintel) alliance framework and mindset (Berling, 1993)

. Apple was relying on their Independent Software Vendors (ISVs) to provide the differentiation at the software level, and continuing to measure themselves against metrics of competitors much more attuned to mass market, not highly differentiated customer experiences.

Conclusion

Apple nearly went out of business during the period of this analysis as they attempted to compete using a paradigm that had nothing to do with their core competency. Attempting to emulate the Wintel standard with their alliances with Motorola and software vendors was not nearly as effective as they had hoped. In addition, the company continued to find challenges in the development of their distribution channels and direction with customers. Worst of all the metrics on hardware performance alone led them in a product strategy direction that began to alienate the best and most loyal customers they had. This led to senior management to get entrenched and seek to find the answers to these complex problems in their financial statements vs. with their strong customer base.

Reference

Berling, Robert J. (1993). The emerging approach to business strategy: Building a relationship advantage. Business Horizons, 36(4), 16. Accessed from: http://www.berlingassociates.com/features/horizon.pdf

Keidel, Robert . THE GEOMETRY OF STRATEGY New York: Routledge, May 2010

Sakakibara, Kiyonori, Lindholm, Chris, & Ainamo, Antti. (1995). Product development strategies in emerging markets: The case of personal digital assistants. Business….....

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