Apple's Strategic Scaffolding: Analysis from 1986 to 1997

Introduction: Apple Without Steve Jobs

The strategic scaffolding of Apple during the time period when Steve Jobs was away (1986–1997) is comparable to that of many other technology companies of the era, which had become reliant more on price/performance ratios than on the uniqueness of customer experience or brand identity. The CEO and senior management of Apple were managing the company more like a traditional PC manufacturer and less like a disruptive innovator. Strategic scaffolding techniques — including an analysis of the persona, performance, puzzle, pattern, and composite portrait of the company — illustrate a business competing more on price and less on a differentiated user experience (Keidel, 2010).

Strategic Scaffolding Analysis of Apple, 1986–1997

Using the strategic scaffolding framework to analyze Apple's history between 1986 and 1997 reveals an organization with a significantly different perspective on resources and constraint management compared to the company it would later become. One of the most significant differences during this period was a distinct organizational character in terms of values, the perception and valuation of time, and a markedly different technical acumen — all dimensions of how companies parse time (Keidel, 2010).

Persona: Brand Identity and Customer Loyalty

All of these factors contributed to Apple having a completely different persona, or organizational personality, relative to its peer companies at the time. This persona was defined to a large extent by an exceptional level of support from its customers, many of whom had for decades purchased the latest generation of computer systems, PDAs, and other personal electronics devices (Sakakibara, Lindholm, & Ainamo, 1995).

Apple had been very successful in taking an initial market strategy based on "the computer for the rest of us" positioning and cultivating a passionate global user base who would willingly invest thousands of hours in beta-testing products at no charge to the company. Apple continued to nurture this persona of being the computer for the everyman, going so far as to define a marketing strategy that embraced and celebrated non-conformity — famously referencing George Orwell's novel 1984 in its landmark advertising campaign. While this campaign aired during the period when Steve Jobs was still with the company, its residual effects carried Apple through the 1986–1997 timeframe. In many respects, that campaign was a critical milestone that would define the company for decades, because it celebrated being different — a key trait that explains why so many customers became such devoted fans over time.

Performance: Hardware Metrics and Strategic Drift

Based on a scaffolding analysis of Apple's performance during this period, a primary concern was reliance on Moore's Law, followed by the continuation of core strengths in desktop publishing and graphics. Apple's senior management pursued traditional areas of cost reduction and performance gains that computers in general, and microprocessors specifically, could provide. This led to performance metrics that pushed the company toward price competition with Microsoft Windows-based laptops and PCs built around the much less expensive Intel processors.

Apple held tightly to metrics of graphics performance and the design of Motorola processors capable of managing millions of graphical computations per second, making their systems the most effective commercially available platforms for advanced graphics functions. The company continued to maintain high performance engineering standards, including millions of graphical calculations per second, refresh rates on vector versus raster graphics, wire-frame and 3D modeling performance, and screen refresh rates.

What began to occur in the company's culture as a result of this focus on graphics performance and CPU acceleration was a bifurcation — a splitting — of product lines. At the high end, Apple was gradually evolving into a workstation company capable of challenging Sun Microsystems or Silicon Graphics for supremacy in graphically intensive computation. At the low end, the company was pursuing an aggressive strategy of dominating the special-purpose laptop segment.

This strategy was entirely predicated on hardware price/performance metrics defining a culture that placed pricing above all else, paradoxically nearly driving the company out of business during this period. The focus on metrics intended to define Apple's competitive advantage caused the company to descend into pricing wars with competitors whose business models were far better suited to that kind of competition. These same metrics caused software to become secondary, since applications could not be measured with the same level of performance precision as hardware. Tragically, the core strengths that would eventually allow Apple to dominate in graphics, phones, MP3 players, and tablets were nearly lost due to a myopic focus on hardware performance metrics alone.

Conclusion

Apple nearly went out of business during the period of this analysis as it attempted to compete using a paradigm that had nothing to do with its core competency. Attempting to emulate the Wintel standard through alliances with Motorola and software vendors proved far less effective than hoped. In addition, the company continued to face challenges in the development of its distribution channels and its relationship with customers. Most damaging of all, the exclusive focus on hardware performance metrics led Apple down a product strategy path that began to alienate its best and most loyal customers. This led senior management to become entrenched and to seek answers to these complex problems in financial statements rather than in the insights of their strong customer base.