Tuesday, March 18, 2008

Steve Jobs on Apple's Strategy

This Steve Jobs' quote in the current issue of Fortune magazine (Most Admired Companies) exemplifies Michael Porter's idea that business strategy is as much about choosing what NOT to do as it is about determining what a company will do. Here is the quote:

"Apple is a $30 billion company, yet we've got less than 30 major products. I don't know if that's ever been done before. Certainly the great consumer electronics companies of the past had thousands of products. We tend to focus much more. People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully (italics added). I'm actually as proud of many of the things we haven't done as the things we have done. The clearest example was when we were pressured for years to do a PDA, and I realized one day that 90% of the people who use a PDA only take information out of it on the road. They don't put information into it. Pretty soon cellphones are going to do that, so the PDA market's going to get reduced to a fraction of its current size, and it won't really be sustainable. So we decided not to get into it. If we had gotten into it, we wouldn't have had the resources to do the iPod. We probably wouldn't have seen it coming."


Alan S Michaels said...


I agree completely with you, Michael Porter, Steve Jobs and Apple - that it's very important to clarify what not to do.

It seems that when a company enters a new business, the decision impacts the organization for many years.

When a company decides not to enter a new product line, the issue is often revisited every few months.

Except for the CEO and the shareholders, it's hard to see who gets rewarded for not doing something.

Alan S. Michaels

Michael Roberto said...

What a great point - there is no reward for inaction.

Wiranti Widyastuti said...

I'm interested on how's Apple can be the 1st most admired company. What happen actually with GE???Why it became the 3rd??can you give more explanation to me???

Looking forward for your feedback.

Thank you

Michael Roberto said...

Well, you cannot become too concerned with the precise rankings each year. The publishers have to sell magazines. Thus, there is an incentive to not have the same company listed at the top every single year. It's similar to what happens with college rankings. Clearly, schools do not change that much year to year, but it would be horribly boring if Harvard were simply listed #1 each year.

farshad said...

in my opinion the steve jobs has worked on three steps: product and market , competition and the merging market.
and also it is very important that he loves the apple company and he says we have hire someones who has love feeling to the apple because with this feel they will help products and company .