1. THE SILENT CRISIS
Apple & The Death of Steve Jobs
Management of Media Organisations
M.A. Media Management
University of Tampere
November 2013
Authors: Federica Ferrera
Bruno Lofreta
Tom Mallah
Marian Zinn

2. PRESENTATION OUTLINE
1. Company Overview
2. Crisis Investigation
3. Organizational Configurations
4. Impact on Levels of Management

3. COMPANY OVERVIEW
Apple Inc.

4. COMPANY OVERVIEW
Apple Inc. is an American company that designs, develops and markets computers and high
tech portable devices.
Apple has enjoyed unrivaled success in the last fifteen years following the return of its prodigal
co founder, Steve Jobs.
Apple products are beautifully designed and functional devices that have changed several
markets forever.
The company and employs a total of 76,100 people. Its headquarter are located in Cupertino,
California.
Sources: (MarketLine,2013; CBSonline, 2013; Bloomberg Businessweek, 2013; Google Finance, 2013)

5. COMPANY HISTORY
1976 - Apple Computer is founded in Cupertino, California by Jobs and Wozniak.
1977 - Apple releases its first successful personal computer: Apple II
1983 - Jobs recruits John Sculley, then CEO of Pepsi-Cola to focus on the Machintosh .
1984 - MAC computer is released.
1985 - Jobs is fired following the commercial failure of the MAC
1996 - Apple has been losing money, for a decade. They buy NeXt – Jobs company founded in
1985, bringing him back to the Company.
1997 - Jobs becomes CEO.
Sources: (MarketLine,2013; Bloomberg Businessweek, 2013)

6. COMPANY HISTORY
2001 – The Ipod is launched expanding Apple’s portfolio.
2003 - Itunes is released. Apple becomes a major player in the online Music Industry.
2007 – Apple spearheads the smartphone market with it’s Iphone.
2010 - Apple relase both IPad and Apple Tv
2011 - Due to his illness, Jobs steps down as CEO of Apple, leaving the position to Tim Cook
Sources: (MarketLine,2013; Bloomberg Businessweek, 2013)

7. CRISIS INVESTIGATION
Apple & The Death of Steve Jobs

8. DEATH OF THE CEO: A CRISIS OF LEADERSHIP
 Steve Jobs, the co-founder & CEO of Apple died in October 2011.
 He fought a long battle with cancer since 2004.
 Jobs remained the public face of Apple until August 2011.
 He was replaced by Timothy Cook (previous COO).
What role did Steve
What role did Steve
Jobs have in the
Jobs have in the
success of Apple?
success of Apple?
Sources: (Markoff, 2011)
What has been the
What has been the
impact of Jobs’ death
impact of Jobs’ death
on Apple since 2011?
on Apple since 2011?

9. THE ROLE OF STEVE JOBS IN APPLE’S SUCCESS
 Steve Jobs is considered among the greatest CEOs in history.
 Steve Jobs is considered among the greatest CEOs in history.
 His persona became synonymous with Apple.
 His persona became synonymous with Apple.
 Jobs guided Apple to market success twice!
 Jobs guided Apple to market success twice!
Jobs’ visionary leadership transformed Apple into…
An Innovation-Driven Organisation
A high-end Lifestyle Brand
Differentiated based on:
•brilliant product design
•a seamless user experience
•a highly integrated hardware, software & content ecosystem
Sources: (Siltanen, 2011; Perenson, 2011; Petrie, 2012; Markoff, 2011)

10. JOBS’ LEADERSHIP & MANAGEMENT STYLE
JOBS HAS BEEN DESCRIBED AS A CHARISMATIC & AUTOCRATIC LEADER
Leading from a passion for his company and his products
Leading from a passion for his company and his products
Encouraged a relentless quest for innovation
Encouraged a relentless quest for innovation
Created a strong Ideology (mission) for Apple
Created a strong Ideology (mission) for Apple
Captured imaginations & inspired audiences through his vision
Captured imaginations & inspired audiences through his vision
Attained extraordinary loyalty & commitment
Attained extraordinary loyalty & commitment
“He was the most passionate leader one could
hope for, a motivating force without parallel.”
(Steven Levy - senior writer for Wired)
Sources: (Siltanen, 2011; Perenson, 2011; Friedman, 2011; Markoff, 2011)

11. JOBS’ LEADERSHIP & MANAGEMENT STYLE
JOBS’ LEADERSHIP STYLE CAN BE DESCRIBED AS ENTREPRENEURIAL
 Focus on creating an innovation- and product driven company
 Focus on creating an innovation- and product driven company
 Direct Control & Deep Involvement in everything at Apple
 Direct Control & Deep Involvement in everything at Apple
 Motivation through Inspiration & Fear
 Motivation through Inspiration & Fear
 Steve Jobs  Product & Marketing Genius behind Apple’s success.
 Steve Jobs  Product & Marketing Genius behind Apple’s success.
“…the passion, intensity, and extreme emotionalism he brought to
everyday life were things he also poured into the products he made.”
(Walter Isaacson, 2012)
Sources: (Siltanen, 2011; Perenson, 2011; Friedman, 2011; Markoff, 2011)

12. THE ROLE OF STEVE JOBS IN APPLE’S SUCCESS
Jobs’ Legacy at Apple was a powerful force
Jobs’ Legacy at Apple was a powerful force
Highly Centralized Power Structure with Jobs at the Top
Strategy reflected the Leaders (Steve Jobs) Vision of the World
Primary Mechanism of Coordination  Jobs’ Direct Supervision & Direction
Jobs as the Creator of a Central Ideology within the Company
Apple’s greatest strength, its visionary leader, was also its greatest liability.
What will happen to Apple in the second era after Steve Jobs?
Sources: (Mintzberg, 1989)

13. LARRY ELLISON ON JOBS & APPLE’S FUTURE
Larry Ellison, the founder & CEO of Oracle, longtime close friend of Steve Jobs, and former Apple
Director, shared with CBS’s Charlie Rose in August 2013 what he believes post-Jobs Apple will look like.
Video: http://www.youtube.com/watch?v=qnA5Hvo9So0
Video
Sources: (CBS News, 2013)

14. THE IMPACT OF STEVE JOBS’ DEATH
Facts to consider when evaluating the crisis:
The company had time to devise a succession plan
New CEO Tim Cook was chosen by Steve Jobs as successor
Apple still has solid leadership with a competent executive team
Leadership was handed over during time of economic strength
BUT most experts believe Steve Jobs cannot be replaced!
Sources: (Helft and Miller, 2011; Gustin, 2012)

15. THE IMPACT OF STEVE JOBS’ DEATH
INDICATORS RAISING UNCERTAINTY ABOUT APPLE’S FUTURE
1
Slowdown in Product & Design Innovation
2
Declining Brand Image & Reputation
3
Growing Competition & Eroding Profit Margins
4
Leadership Turnover & Cultural Change
Sources: (Kelly, 2012; Crow, 2012; Bosker, 2013; Creamer, 2013; Lashinsky, 2013)

16. ORGANISATIONAL CONFIGURATIONS
Apple Inc.

17. MAPPING THE UNKNOWN
- Steve Jobs’ untimely death a few years ago has left many observers
wondering how it has affected the company’s organizational configuration.
- The biggest problem faced in accomplishing this task is Apple’s near fanatical
obsession with secrecy.
“Little knowledge happens to be about all we have, as Apple’s organization is
one of its most closely guarded secrets. Even employees at Apple have little idea of
how the company is organized.”
Source: (Dediu, 2013)

18. APPLYING MINTZBERG TO APPLE
Not surprisingly, Henry Mintzberg’s Entrepreneurial Configuration comes to mind.
1)“Strong Leadership, sometimes charismatic, autocratic”
2)“Activities revolving around the chief executive and often direct supervision”
3) “Visionary process and a sense of mission as a core strategy”
CEO = Steve Jobs (1998 - 2011)
Tim Cook (2011 - Present)
-> Apple’s overall structural configuration
has not significantly changed with the
company’s activities still centered around
the CEO and a few executive reshuffling.
Sources: (Mintzberg, 1989; Dediu, 2013)

19. APPLE IS VERTICALLY INTEGRATED = MACHINE STRUCTURE
Supply Chain Control
Design & Programing
------------------------------------------------------------------------------Operations & Marketing
----------------------------------------------------------------------------------------
Implementation
& Distribution
Sources: (Mintzberg, 1989; Marketline, 2013)

20. APPLE IS HORIZONTALLY INTEGRATED = Innovative Structure
High End E-Retailer
Apple Stores
Online Media Content Distribution Market
iTunes
High End E-Retailer
Apple Stores
Sources: (Mintzberg, 1989; Marketline, 2013)

21. APPLE IS AN ORGANIZATIONAL LEGO
- Mintzberg recognizes the shortcomings of boxing up organizations into single structural
configurations, acknowledging that most firms have a plurality of forms.
- The different structural branches at Apple assume specific configuration roles that move
the company at times creatively (designing & innovating) efficiently
(production & manufacturing) or simply, with purpose (ideology, control & brand image).
- Apple’s organizational LEGO is driven by the following configuration forces
each one influencing the giant entrepreneurial-like structure:
1) Ideological
2) Political
3) Innovative
4) Machine
Sources: (Mintzberg, 1989)

22. “APPLE’S CONFIGURATION FORCES”
Sources: (Lashinsky, 2013; Grobart, 2013)

23. LEVELS OF MANAGEMENT & MARKETS
Crisis Impacts

24. CORPORATE MANAGEMENT & THE POLITICAL MARKET
Cook is addressing Apple’s Corporate management proactively:
Charity:
Dividend,
Shareholders:
Tim Cook has donated to universities and hospitals
with donations.
Apple started to reward his shareholders with a
dividend.
Cook went to
Political Approach: In May 2012, Timrepresentative. Washington and met
with US congress
Environmental
Issues:
The hiring of Lisa Jackson, to overlook the company's
environmentally friendly strategies, which recently
received some criticism.
Sources: (Lowe Gregory F. and Alm Ari, 2001; Kelly Heater, 2012; Linkous John, 2012; Palmer, 2012; Appleinsider, 2013; Worstall Tim, 2013)

25. OPERATIONAL MANAGEMENT & THE PROFESSIONAL MARKET
An increased number of employees has left Apple to other companies in the Silicon Valley
For many officials and observers, Apple has lost its innovative spirit and startup characteristics
Apple has expanded its in-house marketing department rather than outsourcing.
Tim Cook is operationally efficient at matching supply and demand
Sources: (Cheng, 2012; Diaz, 2013)

26. STRATEGIC MANAGEMENT & THE OPEN MARKET
Competitive Advantages
Currently undermined by:
Differentiation
Product design, user experience.
Imitation and cost drive a lot of buyers to forgo
differentiation over time.
(Samsung/Microsoft = big market share)
Brand Loyalty
Ability to link its products and
content via Itunes/Icloud, Brand
Image, Ease of use.
Cheaper Iphone C model erodes brand image and
possibly damages its high-end retail strategy.
Innovation
Iphone and Ipad were gamechanging No new groundbraking devices since 2010 (Ipad
products upon release.
release)
“The crucial question in determining profitability is whether firms can capture the value they create for buyers or
whether this value is competed away to others.”
Sources: (Marketline, 2013; Porter, 2004)

27. BUSINESS MANAGEMENT & THE POPULAR MARKET
HOW HAS APPLE’S BUSINESS BEEN AFFECTED?
 The company proceeded with its unprecedented growth internationally in the last two years
 Annual updates of the existing product lines continued to produce high sales and record profits
How much of this performance must still be attributed to Jobs' regime?
 The company has…
Very solid finances with cash reserves of $150 billion
A highly valuable brand
An existing product portfolio that continues to remain very successful
Loyal followers around the globe
 Under Cook, Apple managed to capitalize very well on the existing products developed under Jobs
 Even without a new innovative product, Apple will remain a strong contender in its key markets for years to come
Sources: (Pallotta, 2013; Lashinsky, 2013; Finnie, 2013)

28. Business Management & THE POPULAR MARKET
HOW HAS APPLE’S BUSINESS BEEN AFFECTED?
 Growing uncertainty if Cook has a bigger vision for Apple & if he can retain its innovative drive
 BUT Jobs thought about products well into the future!
Likely that his new product vision still directs the plans of Apple for the next few years at least
 Apple remains secretive about its future plans.
Unknown what Apple has been working on the last three years since the launch of the iPad.
Hints of new product categories in the development (wearable computers, a TV, software for automobiles, etc.)
Sources: (Gustin, 2012; Pallotta, 2013; Finnie, 2013)

29. BUSINESS MANAGEMENT & THE POPULAR MARKET
WHAT IS THE FINANCIAL IMPACT?
 Apple is continuously losing profit margins with its existing product portfolio
 Company is dependent on one product more than the rest to maintain its financial results
Apple's main income source is the iPhone -> 2/3 of Apple's revenues!
 Q4 2013 Sales Performance
iPhone sales grew by 26% to 33.8 million.
iPad and Mac computer sales are flat at 14 million and 4.6 million year-over-year.
iPod sales continue to decline.
 In 2013 revenue increased from $156.5bn to $170.9bn (aggressive international sales)
 Financial year ended with first profit decline in 11 years of 11%
Sources: (Kelly, 2012; Fiergerman, 2012; BBC News, 2013; Velazco, 2013)

30. Business Management & THE POPULAR MARKET
HOW HAS APPLE’S BRAND BEEN AFFECTED?
Apple’s brand prestige is one of its most valuable assets & a key differentiator creating competitive advantage.
INDICATORS OF APPLE’S BRAND IN DEMISE
1
Inferior Product launches & Quality Control Issues
2
Weakening Media Relations & Advertising Message
3
Declining Perception of Exclusivity & Coolness
Sources: (Siltanen, 2011; Crow, 2012; Lashinsk, 2013; Creamer, 2013; Faw, 2013)

31. CONCLUSIONS
It is still too soon to say how innovative Apple will remain without Jobs.
Where is Apple going and how will it get there is anyone’s guess.
Sales are still strong and the company has billions in reserve.
One can hardly talk about a deep crisis.
But the question remains: Can Apple come up with another breakthrough product
or is it doomed to ride on Steve Jobs’ past successes and slowly decline?

32. REFERENCES
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33. REFERENCES
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