Apple Case Study 2006

Apple Computer 2006, Case study

I believe many of us are using Apple’s products these days. Personally, I have an iPod touch and iPod Nano, and currently I am thinking of getting a MacBook. To be honest, I did not really like Apple’s products till 6 years ago when they released the iPod Nano. I remember my very first computer  being an Apple PC. It was around 20 years ago and I was so disappointed with the PC. I threw the Apple PC a year later and brought an IBM PC. Why? Simply because I could not play most of the games on the Apple PC and exchange files with my other friends who used IBM PCs. The worst of all, I paid premium price for the Apple PC. It was like spending a lot of money to buy a digital prison for myself. Therefore, my impression of Apple’s products was very poor. I would use “the producer of premium rubbish” to describe Apple in the past.

So, how did  Apple turn-around from producing “premium rubbish” to “premium wonder”? A Harvard Business School case study  titled “Apple Computer, 2006” written by David B. Yoffie and Micheal Slind describes the amazing transformation of Apple. This case study offers a very good insight as to why entrepreneurs should learn and progress from both their successes and failures.

Freakonomics and Super-Freakonomics

                                                      

I came across the book titled  Freakonomics in 2005. A good friend of mine, Bryan recommended the book to me. He told me that the book was about applying economics theories and principles in real life situations. He also said that the content was quite entertaining. I was puzzled by the comment. How can economics be entertaining? I have been studying economic for years since high school. I could never relate economics with entertainment. To be honest, I did not think that economics could be applied in real life as well. They were just theories which only worked out in the ideal world. However, after I have read Freakonomics and its sequels Super-Freakonomics, later published  in 2010, I have to admit that I was wrong.

The authors Steven D. Levitt and Stephen J. Dubner used microeconomics concepts and principles to explore some controversial events and social phenomenon we witness in real life . Such as, why do drug dealers still live with their moms? What makes a perfect parent?  How is a street prostitute like a department-store Santa? Why should suicide bombers buy life insurance? The depths of these case studies were almostacademic standards, and surprisingly, they were all very realistic and interesting.

As the authors stated, the proposition  of writing Frackonomics and Super-Freakonomics was to start a conversation with the general public, not to come up a theory to predict the future and solve problems as many people would expect from economists. However, four key themes were delivered through these unusual case studies. 1) People were always response to incentives.  2) The definition of incentives was dictated by the given environment. 3) Objective statistical analysis could clarify situations and identify possible solutions. 4) Unintended consequences were inherited in every decision.

Getting Past No: Negotiating In Difficult Situation (6/6)

What if, despite all your efforts to build your opponent a golden bridge, he still refuses to come to an agreement? Your natural reaction would be to abandon the problem solving approach, and shift the nature of the negotiation into a power game.  In a power game, you switch from listening and acknowledging to threatening. From reframing your opponent’s position to insisting on your own.  And from building a golden bridge to force him down from his position.  The worst part in  playing  a power game is that you escalate  not only your means, but also your ends. When you invest more of your resources in the battle, you naturally want more from your opponent to compensate for your time and effort. Thus, your goal shift from mutual satisfaction to victory, or from win-win to win-lose.  This is when people say “Screw it! I have had enough of his nonsense. If he is so childish about this, I will teach him a hard lesson!”      

The power game is supposed to work as follows: You threaten or try to coerce your opponent and then he backs down. However, unless you have a decisive power advantage, he usually resists and fights back. He gets angry and hostile, reversing your attempts to disarm him. He sticks to his position even more, frustrating your efforts to change the game. He becomes increasingly resistant to reaching agreement, not only because you may be asking for more but because agreement would now mean accepting defect. This demonstrates the typical power paradox: “The harder you make it for him to say no, the harder you make it for him to say yes.”  

Getting Past No: Negotiating In Difficult Situation (5/6)

The philosophy of “BUILD THEM A GOLDEN BRIDGE” is from one of the Sun Tzu strategy, “Don’t push your enemy to the corner, and build them a golden bridge to retreat across.” Why? Even though you have evaluated the situation objectively (step one), created positive environment to negotiate (step two), and engaged your opponent in problem solving negotiations (step three), you still have to bring he/she to a concrete agreement. Too often, this is where negotiations fall apart, because they underestimate the influence of human factors when they are forming terms and conditions in agreements.    

A classic case study from a spectacular failure of a world’s biggest media merger can demonstrate the devastated power of human influence in negotiating simple details. In 1958, CBS was fighting a hostile takeover bid by media tycoon Ted Turner. Neutharth, president of Gannett, had long had his eye on CBS and had cultivated a cordial relationship with CBS president Tom Wyman. After several exploration meetings the two men reached agreement on most of the fundamental issues. They decided that because of his age and greater experience, Neuharth would become chairman and CEO, while Wyman would become president and chief operating officer. It all went very smoothly, until when executives from both companies began to prepare details. Neuharth described this turning point in his memoir.