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Back in 1997, when Steve Jobs returned to the company he founded, few would have thought that the failing, niche Apple Computers would one day be recognised as one of the most innovative companies in the world, transcending the barriers of the computer industry to compete in the consumer electronics, telecommunications and music industries. Since Jobs’ return Apple has increased from a $2 billion (£1.32bn; €1.56bn) 1 company in 1997 to a nearly $472 billion (£312.2bn; €368.4bn) company in January 2013, having briefl y overtaken Exxon Mobil to become the world’s most valuable company by market capital- isation in August 2011. Apple was recognised as the most innovative company in the world by Business Week for seven years in a row (2005–11) and led Fortune’s world’s most admired companies for fi ve consecutive years (2008– 12). Building on innovative products that have redefi ned their markets, such as the iPod, the iPhone and the iPad, a consumer base as loyal as a fan club, and a business model characterised by integration and synergies that no competitor could easily imitate, Apple continued its extra- ordinary performance, reporting $156.5bn in revenues and $41.7bn net income in 2012.

Jobs’ turnaround and rebuilding an innovative organisation

Things have not always been that rosy for the company once known as the underdog of the computer industry. During the time when Steve Jobs was away from the organisation (1985–97) Apple progressively degenerated to the point of struggling for survival. Apple charged pre- mium prices and its computers were based on a closed proprietary operating system that was not made available

CASE STUDY

Strategic leadership and innovation at Apple, Inc. Loizos Heracleous and Angeliki Papachroni

This case looks at the extraordinary success of Apple as an innovative company under the leadership of Steve Jobs. In August 2011 Jobs resigned as CEO due to ill health (and sadly died soon after) – he was succeeded by Tim Cook. Could the new CEO manage the transition to new leadership from Jobs’ unique approach and main- tain Apple’s record of achievement in an increasingly competitive marketplace?

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This case was prepared by Professor Loizos Heracleous and Angeliki Papachroni, Warwick Business School, UK. It is intended as a basis for class discussion and not as an illustration of good or bad practice. © Loizos Heracleous and Angeliki Papachroni 2013. Not to be reproduced or quoted without permission

for cloning by other computer makers, at a time when less costly IBM-compatible PCs gained mass appeal. Its cost base was too high compared to its major competitors. This combination of factors led to shrinking market share and low profi tability. Apple lost momentum in the PC industry, despite the efforts of three different CEOs to

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EBSCO Publishing : eBook Collection (EBSCOhost) – printed on 4/3/2018 8:09 PM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467

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