Apple Case Study

At the time when Apple's new CEO, Michael Spindler decided to implement a Balanced
Scorecard in 1990, the company was experiencing considerable growth but Spindler
recognized that it was also incurring higher costs. Their vision had gone awry and there
was little agreement among managers about the definition of success. "Our products are
for everyone. We don't build a profile for a particular group. What we are trying to do is to
build a product that would be used by the most people possible." Apple was making the
mistake of trying to be all things to all customers. "There was a tremendous tension at
Apple at the time between sales and engineering, and it showed in the numbers." The BSC
was intended to focus Apple on defining the actual meaning of success; both long term
and short term, and providing the measures and a forum for answering whether the
company was successful. The BSC stressed clarifying and translating the vision; Spindler
wanted to make sure that the struggles that Apple had been facing for the past years
would not recur. He felt that a common and comprehensible framework that would more
clearly articulate and better communicate the existing vision. 3.2.1 Building the Scorecard
To help build the scorecard, executive strategy meetings were held wherein the definition
and direction of the company was discussed and debated. From these meetings, "the four
or five most important issues that will determine whether or not we are successful" were
identified and were to become the four perspectives of the BSC. Measures and initiatives
were then developed for each of these goals, often using what was termed as a Target
Business Model. This model would help determine the current position of Apple with
respect to the goal, the desired position, and the plan for reaching the desired position.
This technique was used to close the gap between the current and desired situation.
Target Business Modeling was found to still be in use at Apple well into 1996. Apple's first
scorecard was constructed over a period of 18 months with test scorecards in field trials
taking as much as two years. 3.2.2 Disruptive Learning Apple's environment was unique in
that it was extremely future oriented, ideals driven, and had had an incredibly successful
past. But in recent years it had not lived up to its potential and there was much frustration
within the company as to why. There was also skepticism concerning the effectiveness of
the BSC. This made for a challenging environment for the BSC which in fact, required the
most attention. "This was the hardest part, aligning the organization and making everyone
a believer." 3.3 Results and Impact Apple had made a strong commitment to the BSC with
a large investment in time and resources. The goal achievement measures served as a
means of tying executive incentives to the new measures of success. As the scorecard
began to be implemented, it was clear that it would cause many changes. The
measurement and management accountability initiatives had often revealed a
considerable gap between the desires of the senior executives and the actions of middle
management and the scorecard would expose this. The Target Business Model technique
required that specific project initiatives be linked to the goals and often times it was found
that there were too many conflicting projects. At this time, decisions of which products to
discontinue emerged from a scrutiny of the long term profit and strategic importance
measures. This often created a "winnowing down" of unfavorable projects. The most
disturbing finding though, was that Apple was often far from the intended goal and did
not know what actions to take. This had caused a pattern of moving people from project
to project, creating what was termed as "resource Frittering".
3.1. Overview of Apple

Apple Inc. is a well-known high-tech company that develops and sells computers,
computer software, mobile consumer electronics, and digital distribution. Some of the
well-known hardware products are the Mac computer and the iPod, iPhone, and the iPad.
Apple was originally founded as a computer company on April 1st, 1976. But over the
years, they have moved into a new market and have become a competitive company in
numerous markets such as the mobile phone market with the iPhone, the digital music
market with the iPod and iTunes, the smartphone market with the iPhone, and most
recently, the tablet market with the iPad. Apple Inc. has been in long-term growth and is
continuing to expand their markets and product base. According to Apple's official website,
they are constantly focused on improving their products and services in order to meet and
exceed customer needs and wants. Apple does not only want to meet the needs of the
customer, they seek to identify those needs and wants and create innovative products to
satisfy their customers. They do this by understanding changes in the market environment,
setting goals for their consumers, figuring out how to retrieve loyal or potential customers,
and building strong brand and product awareness. Due to the high competitive markets,
product quality, and innovations in technology, there are growing opportunities for Apple
Inc. in strategic markets. These markets are high growth and high share, which can allow
Apple to better capitalize on their products and earn higher profits. In order for Apple to
evaluate their current and future business in these changing markets, they can use a
strategic management tool called a Balanced Scorecard. Apple should strive to learn how
to make this management system their primary strategic planning and management
system. With globalization and innovation of technology, changes in the business
environment can happen often and quickly. A Balanced Scorecard can be a constant
process and a tool to provide timely feedback and lessons learned in order to improve
general strategic planning and management.