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Apple incorporation is an American multinational based in Cupertino, California in the United States. The company’s core business is production and selling of electronic consumer products. Currently, Apple is ranked as the most profitable electronic company in the world. Apple established from a very simple background by two people. These were Steve Wozniak in collaboration with Steve Jobs. They moved to a garage from the bedroom where the operation started. While still working in the garage in 1975 they invented a personal computer. This discovery marked the first step towards the invention of personal computers. Since this invention, apple grew exponentially and in 1980 the company saw the need to grow its capital base at it launched an initial public offer. Jobs gained his experience first-hand as a result of microcomputer industry development and the emergence of internet. The share of Apple microcomputer plummeted from 12 to 4 percent after Jobs was ousted by John Scully in 1985 by the use of the board of directors when he became the CEO of Apple.
Circumstances forced the company to consider returning Jobs. Later in 1997 Jobs came back to Apple as the interim CEO and was able to steer the company back to profitability. He devoted his efforts in developing technology that was customer oriented and offered customers a unique experience. This created an indication that Apple was posing a challenge to Nokia. He lead the company offer to the market the first laptop and desktop computers in 1998 known as the iMac. It created an efficient standard and an easy to use design and this earned him great respect and high profitability to the company. There was an emergence of a notebook computer after the iMac called the iBook in the following year, 1999. It had the wireless connection, well designed and easy to use than the iMac. He ensured an updated iMac and iBook yearly by use of the innovative technology and then introduced several products that proved meaningful to customers.
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Definition of a Crisis
There are various circumstances and conditions that can be said to amount to a crisis and this will vary between the electronic consumers in this case. The due consideration of a crisis is that it generally disrupts the basic activities of a firm. There are some variables that bear the definition of a crisis for the technology firms that include: the nature of the event, the significance of the issue to stakeholders, impact on other consumer electronics firms and perhaps industries; how many and how quickly individuals inside and/or outside of a particular firm need to be helped or informed; who and how many people need interpretation of the events, and how accessible those individuals are; how much interaction with the media is necessary; what the media choose to emphasize; how much the organization needs to assert control and demonstrate that it is capable of responding; and how quickly the firm needs to respond (Shelton et al., 2003). A crisis may also be defined by feelings of panic, fear, danger, or shock.
The Crisis at Apple
The corporate culture at Apple and the morale of employees was stable as the firm focused on design, manufacturing and sales of mobile phones. However, the shift to smart phones that used an internet platform that would make internet content available was not a good fit with the traditional Apple corporate culture. Because of the need to develop software more advanced than iTunes, applications and smart phones, Apple needed to compete in the overall high-technology community, where the best and brightest talent had always been attracted by organizations on the “cutting edge” with unsolved technical challenges. Unfortunately for Apple, the perception among individuals in the high-tech community was that firms such as Google, Yahoo, and the new internet startups provided the best opportunities. The best and the brightest of these individuals were very astute, and very knowledgeable of new, emerging technologies and new product developments by various high-tech organizations. They preferred to work in an environment where personal and financial rewards were the greatest.
They also desired a sense of excitement in their tasks and activities, and were both collaborative and competitive in their quest to be at the forefront of technological innovation (Scott, 2011). Propagation of this perception posed a challenge for Apple’s management in its attempt to hire the type of software engineers and researchers necessary for innovation and development of advance smart phones coupled with high internet applications and content to enhance the firm’s competitive leadership in the marketplace. In 2001, Apple iTunes 1.01 was introduced to provide songs and video files for Apple computer users by downloading them from the internet, it was apparently not clear to how the features that had been introduced could be sustained in the market and Apple did not know how to react.
Crisis Description
The tremendous profit that was generated by apple during the late 1980s was due to the high scaled strategies by Louis Gasee that had been in use for quite some time. There was the usual price fall of 20 percent in the operating stock price during the Christmas busy fiscal quarter. This made a clear indication that there was dire need for change. Upon the resignation of Gasee, it resulted in the division of the authority he had in regard to the development of the products by his predecessors. During the reign of Gasee he did a product design vision his own way unlike that of Steve Jobs whom he succeeded. He controlled his own engineer’s way provided the company maintained the high profit margin. In this case, the asylum was being run by the patients in accordance with the Carlton 84 in the argument of Jim Carlton. Gasee had impressed a unifying vision and this assisted so much to hold the Apple products for a very long time even after he had left. The corporate success and his great concern on the technical performance of the company could be realized in the Apple desktop computers physical design in the year 1990. The influence on the job remained visible in the products although in a faded form, the prove of Gasee would be ephemeral and more unsteady if in the initial stages was unrestrained harmfully. By the time Gasee resigned, the product ilne of Apple had three Apple II models that were aging and they were being considered as consumer products during the time of sale. That year later after his resignation, the version IIc+ slightly upgraded from IIc would be phased out but the IIgs would remain in the market for some time and the IIe which was vulnerable would have more time in the market than IIgs but by then the technology of Apple had been clearly surpassed.
The machine that was fairly affordable to the consumers among others was Macintosh Plus which was being sold for $200. The remaining computers were expensively marketed targeting the corporate market that had been intentionally designed for. The departure of Gasee resulted in several restructuring meaning that Apple was among other manufacturers of computer being less differentiated. The release of the version 3.0 that was the popular Macintosh imitation known as look and feel slightly boosted Apple’s accessibility.
In the meantime there was an infusion of the language of the White Snow that had helped in the manifestation of the technology of Apple into the standard that was in the physical form as it filtered down to the manufacturers PC. There was an increase in the appearance of some details of the Snow White on PC and this was not a surprise as Apple computers had gained attention long time ago. Again the products of Apple at some point became less differentiated leading to lowering of their perceived value.
The key points that are very relevant in the op-ed are as highlighted below;
• The environmental record influence on the apple products
• The labor practices factors and,
• The finance that is very crucial
The resignation of Gasee’s brought a crisis due to the restructuring and this made apple less different in terms of manufacture. The consumer products that were being sold like the aging Apple II model and other products were quite low in comparison to the market requirement by then.
The employee’s condition of work that exist at the apple factories in China where there is production of iPod under the contract manufacturers that are Faxconn and the Inventec. The store has over 200,000 workers assigned there. They wok for 60 hours in a week and are paid $100 in a month that generally accounts to a little for over half of the workers earning. Apple has launched an immediate investigation and is currently working with it manufacturers to facilitate the good acceptable working conditions and other strategies are underway to solve the same crisis.
Crisis Facing Apple Products
Apple company has experimented by the use of a number of other consumer targeted products that including portable CD audio players, digital cameras, TV appliances speakers, and video consoles. There have been huge investment in the Newton division that is problem-plagued that is based on the market forecast of John Sculley that is unrealistic. Ultimately, none of above listed products helps, as the market share of Apple and stock prices constantly continued to slide in regard to the above products, the company saw series of Apple II as being extremely expensive to manufacture, while it took away sales from the other low end Macintosh. Apple introduced the Macintosh LC with that had a single expansion slot convenient for the use of a rare technology invented by Apple known as IIe Card. This new discovery was meant to move the users of Apple II to the new platform called Macintosh platform (Scott 86).
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Apple discontinued the sale of Apple II some years back. Microsoft proceeds to gain the share of the market with Windows focusing on how to deliver software to the cheap commodity computers that are personal while Apple on the other hand delivers richly engineered, but expensive ones. Apple depends on the profit margins that are high and there is no clear development of a feedback. Instead, Microsoft is sued for using a similar graphical user interface in Apple computer to that of the Apple Lisa, in the case that involved Apple Incorporation vases Microsoft Corporation. The lawsuit has been deferred for several years before it was dismissed recently.
There have been a number of major product flopping and missing deadlines affecting the reputation of Apple, and this has led to the replacement of Sculley by Michael Spindler as CEO. The Newton product was the first foray of Apple to be introduced into the PDA markets, and also among the earliest in the industry’s appearance. Despite experiencing a financial decline right from its launch, the new product helped give way for the pilot Palm that gave the company exclusive rights to own the iPhone brand in the future. Apple has been able to develop some alternative platforms in regard to Macintosh.
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Apple has also started to experiment in the provision of an online portal only for Mac that is referred to as e-World, developed in conjunction with America Online and its design an alternative that is friendly to Mac and to other services online like the CompuServe. The platform of Macintosh has become outdated due to it not built for multitasking purpose, and other several important software routines that are directly hardware programmed. In addition, there is competition Apple faces from OS/2 and the UNIX vendors like Sun Microsystems. There is need to replace Macintosh by a platform that is new, or even reworked to run on very powerful hardware.
Finance
The financial experience that Apple had in its fiscal year that ended in September 2011, it experienced a financial setback with $65 billion in revenues which decreased significantly from $108 billion in 2010. Apple was able to achieve these results as it was losing the share of the market in certain categories of product. Apple came up with a plan on March 19, 2012, for the price of $2.65 per dividend per share that began in the quarter that was fourth in 2012, approved by their directors of the board. it closed on August 20, 2012 at a share record price of $110.15. With some 570,596,000 shares outstanding, it had $108.98 market capitalization.
At this point apple had reached the lowest nominal in the market capitalization that had never occurred and almost below a set record in 1999 by Microsoft. The member of the British Parliament known as Charlie Elphicke did and had the research published on 30 October 2012 indicating that some multinational companies like Apple Inc. were only paying 3 per cent tax to the treasury that was not even the bear minimum in regard to their profit. It was extremely below the standard Corporation Tax despite the fact that company recorded lucrative profits in its European market. It took the intervention of George Osborne, the then Chancellor of the Exchequer to excerpt pressure on multinationals, such as, Google and Coca-Cola Corporation to clearly state the rate tax that was in tandem to European tax law. The chancellor maintained that all state contracts should be withdrawn from multinationals that do not comply with the current tax regimes. Most analyst questioned the move saying that it was likely to cause serious financial problem is implemented in its state.
Labor Practices
According to the mail report basing on the conditions of work at the factory in China in which the contract manufacturers including, Foxconn and the inventec produce the iPod. It is also stated in the article that the complex factory that does the assembly of the iPod comprises of more than 200,000 employees who work and live in the factory and they regularly work for more than 60 hours in seven days.
The article further reported that workers were seriously underpaid with each earning $100 per week. Furthermore, Apple admitted in 2011 that most of the company’s suppliers, especially in china engaged in hiring of minor children. The company’s factories exposed its workers to dangerous working conditions, such as exposure to n-hexane, this is a neurotoxin, a cheaper cleaning agent compared to alcohol that is safe.
The Environmental Record
Just like most electronic manufacturers, Apple has been accused by rights groups over its poor environmental track record. Greenpeace has done campaigns against Apple on issues that relate to environmental pollution. There has been a campaign by environmental organizations including Greenpeace against the company’s use of poisonous chemicals in its products and, in particular, the inclusion of the BFRs and the PVC in the products. This has made to eliminate the BFRs and PVC across its range of products.
The Agency on the environmental Protection rates Apple as highest among the notebook computers producer, and fairly rated in comparison to manufacture personal computers and the LCD displays. Although, Apple continued to upgrade the MacBook Pro in the replacement of the cold cathode fluorescent lamp, which have been done for all notebooks, more is to be done in the phasing out of PVCs and the BFRs from the internal components. Apple is able to provide necessary information regarding electrical consumption of every product emissions, and materials. Apple is currently upgrading the MacBook and iMac; this is the act of substituting cold cathode incandescent light, backlit liquid crystal displays with mercury-free displays. This shows that the Apple computers are to be free from any mercury LED backlit displays.
All computers from Apple have an EPEAT Gold status. A nonprofit organizationClimate Counts is dedicated to direct the consumers for the greenest companies; it has given Apple a score of between 50- 52 from the total 100 that elevates Apple in the top category referred to as Striding.
There has been an increase from 2008 when the Climate Count organization rated apple at 11points from 100 which meant that it was that last rated among other electronic companies adding that at that time Apple was not among the choices to pick from for the conscious consumer of Climate Count. Apple had environmental hazards until it was ordered by the Chinese authority to close down a section of manufacturing plant in October 2011 after residents nearby raised some environmental concerns.
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