How agile is Apple? | Case Study Apple | Agile Education by Scrum Academy

Agile Education by Agile Academy

4 Oct 202204:18

Summary

TLDRThis video delves into Apple's journey as a beacon of innovation, tracing its history from the PC revolution to near bankruptcy, and Steve Jobs' return. It highlights Apple's strategic shift from reliance on Mac sales to diversifying with the iPod and iTunes, and ultimately the iPhone. The video underscores the importance of disrupting one's own successful products to avoid obsolescence, as seen in the decline of companies like Kodak, Blockbuster, and Nokia, and emphasizes the power of innovation in driving long-term success.

Takeaways

💡 Apple was pivotal in the PC revolution alongside Microsoft, providing hardware while Microsoft focused on software.
🔄 Steve Jobs was ousted as CEO in 1985 but returned in 1996 to lead Apple back from near bankruptcy.
📉 The Mac computer's revenue share dropped from 86% to 10% of Apple's total revenue due to the introduction of new products and services.
🎶 Apple revolutionized the music industry with the iPod and iTunes, creating a legal music download and portable listening experience.
📈 Despite increased sales, Apple was willing to disrupt its own successful iPod to pave the way for the iPhone.
📱 The iPhone, introduced in 2007, combined features of an iPod, a phone, and an internet device, making the standalone iPod obsolete.
📉 iPod sales initially soared but declined as the iPhone became the new standard, showing Apple's willingness to disrupt its own products.
💥 Many organizations fail by not disrupting their own successful products, leading to their irrelevance, as seen with Kodak, Blockbuster, and Nokia.
🛠️ Innovation should extend beyond traditional products to new customer segments and needs, as Apple did with the transition from Mac to iPod.
🔫 Don't fear killing the cash cow; instead, embrace disruption to avoid becoming obsolete like other failed companies.
🚀 The case study of Apple highlights the importance of continuous innovation, expanding into new markets, and self-disruption to maintain relevance and success.

Q & A

What was Apple's role in the PC revolution?
-Apple was one of the most important companies in the PC revolution, providing the hardware, while Microsoft focused on the software.
Why was Steve Jobs fired as Apple's CEO in 1985?
-The script does not provide specific reasons for Steve Jobs being fired, but it mentions his return to Apple in 1996 when the company was close to bankruptcy.
What was the significance of Steve Jobs' return to Apple in 1996?
-Steve Jobs' return marked a turning point for Apple. He initially took over as interim CEO and led the company through a period of incredible growth and innovation.
How did the revenue share of Mac computers change from the early 2000s to the present?
-In the early 2000s, Mac computers accounted for 86 percent of Apple's revenue. Over the past 20 years, this has decreased to only 10 percent due to the introduction of new products and services.
What was the business model that Apple created with the iPod and iTunes Music Store?
-Apple created a business model around legally downloading music and making it accessible on the go, which not only boosted iPod sales but also increased Mac sales as the Mac became the hub for the iPod.
Why did Apple decide to introduce the iPhone in 2007?
-Apple introduced the iPhone to disrupt their own successful product, the iPod. They saw more potential in the market and wanted to avoid being disrupted by competitors.
How did the introduction of the iPhone affect iPod sales?
-The introduction of the iPhone, which combined an iPod, a phone, and an internet navigation device, led to a decline in iPod sales as consumers no longer needed a separate iPod.
What is the lesson from Kodak's story in the context of innovation?
-Kodak invented the digital camera but failed to adapt, leading to their disruption by competitors. This illustrates the importance of not just inventing but also innovating and adapting to market changes.
What happened to Blockbuster and why is it relevant to Apple's strategy?
-Blockbuster failed to adapt to the changing landscape of media consumption and was disrupted by Netflix. This serves as a cautionary tale about the dangers of not innovating and disrupting oneself.
What was Nokia's mistake in 2007 that led to their disruption by Apple?
-Nokia failed to anticipate the shift towards smartphones and was disrupted by Apple's iPhone. This highlights the importance of being proactive in innovation rather than reactive.
What are the key takeaways from Apple's case study on innovation?
-The key takeaways include the need to innovate beyond traditional products, address different customer segments and needs, and have the courage to disrupt one's own successful products to avoid being disrupted by competitors.

Outlines

00:00

🍏 Apple's Journey from PC Revolution to Innovation

This paragraph traces the history of Apple, highlighting its pivotal role in the personal computer revolution alongside Microsoft. It discusses the initial success and failures of the company, leading to Steve Jobs' dismissal in 1985 and his return in 1996, which was crucial to Apple's survival. The narrative then shifts to the transformation of Apple's revenue structure, where the Mac computer's contribution to revenue significantly decreased from 86% to 10% over two decades. This change was not due to a decline in Mac sales but rather the introduction of new products and services, starting with the iPod and iTunes Music Store, which revolutionized the music industry by enabling legal downloads and portable access.

Mindmap

Keywords

💡Innovation

Innovation refers to the process of introducing new ideas, methods, or products that are different from what currently exists. In the context of the video, innovation is the driving force behind Apple's long-term success, enabling the company to evolve from a PC manufacturer to a diverse technology giant. The video illustrates this with the transition from Mac computers to the iPod, and later the iPhone, showcasing how Apple continually innovates to stay ahead.

💡Organization's Long-Term Success

This concept highlights the sustained growth and viability of a company over an extended period. The video emphasizes that Apple's commitment to innovation has been a key factor in its long-term success, as it has allowed the company to adapt to changing market conditions and consumer needs, thereby maintaining its relevance and profitability.

💡PC Revolution

The PC Revolution refers to the period in the late 20th century when personal computers became widely accessible and started to transform various aspects of daily life and business. Apple, along with Microsoft, played a pivotal role during this time, with Apple providing the hardware and Microsoft focusing on software, as mentioned in the script.

💡Steve Jobs

Steve Jobs was a co-founder of Apple Inc. and served as its CEO. The video script recounts his dismissal in 1985 and his return to Apple in 1996, which marked a significant turning point for the company. His leadership and vision for innovation are credited with Apple's resurgence and diversification of its product line.

💡Bankruptcy

Bankruptcy is a legal status for individuals or entities that are unable to repay their outstanding debts. The script mentions that Apple was close to bankruptcy before Steve Jobs returned, which underscores the severity of the situation and the dramatic turnaround that occurred under his leadership.

💡iPod

The iPod was a portable media player designed and marketed by Apple. It revolutionized the way people listen to music and was a significant product for Apple, as discussed in the script. However, its importance to Apple's revenue declined as the company introduced new products like the iPhone, which incorporated the iPod's functionalities.

💡Revenue

Revenue refers to the income generated from a company's business activities. The script highlights the shift in Apple's revenue sources from Mac computers, which once accounted for 86 percent of its revenue, to a more diversified portfolio, with the Mac's share dropping to 10 percent.

💡Business Model

A business model describes the rationale of how a company creates, delivers, and captures value. The video discusses Apple's innovative business model with the iPod and iTunes, which allowed for legal music downloads and created a new market for portable media devices.

💡Disruption

Disruption in a business context refers to the introduction of a new product or service that changes the existing market dynamics, often rendering previous products or services obsolete. The script uses the iPhone's introduction as an example of how Apple disrupted itself and the market, leading to the decline of the iPod as a separate product.

💡Cash Cow

A cash cow is a product or business unit that generates a steady and reliable income with little or no further investment. The video script points out that Apple's willingness to disrupt its own cash cow, the iPod, with the introduction of the iPhone, was a bold strategic move that prevented other competitors from disrupting them.

💡Irrelevance

Irrelevance in a business context means becoming outdated or no longer meeting the needs or interests of consumers. The script warns of the risk of becoming irrelevant if a company fails to innovate and adapt, using examples such as Kodak, Blockbuster, and Nokia, which were disrupted by new technologies and market entrants.

Highlights

Apple was a key player in the PC revolution alongside Microsoft, focusing on hardware while Microsoft focused on software.

Steve Jobs was fired as Apple's CEO in 1985, but returned in 1996 to revive the company from near bankruptcy.

Apple's revenue from Mac computers dropped from 86% to 10% over 20 years due to diversification into new products and services.

The introduction of the iPod and iTunes Music Store created a new business model for legal music downloads and portable access.

The Mac became the hub for the iPod, increasing Mac sales as well as iPod sales.

Apple was bold enough to disrupt its own successful iPod by introducing the iPhone, which combined an iPod, phone, and internet navigation device.

The iPhone's introduction led to a decline in iPod sales as it rendered the standalone music player obsolete.

Many organizations fail to disrupt their own successful products, leading to disruption by competitors and eventual irrelevance.

Examples of companies disrupted by competitors include Kodak, Blockbuster, and Nokia.

Kodak invented the digital camera but failed to capitalize on it, leading to their downfall.

Blockbuster had the opportunity to acquire Netflix but missed the chance to adapt to the digital streaming market.

Nokia was the leading mobile phone company in 2007 but was disrupted by Apple's iPhone and lost its dominance.

Innovation is crucial for an organization's long-term success, as demonstrated by Apple's transition from Mac to iPod.

Innovation should go beyond traditional products and address different customer segments and needs.

Organizations should not be afraid to disrupt their own cash cows to avoid being disrupted by competitors.

The case study of Apple shows the power of innovation and the importance of being willing to disrupt one's own successful products.