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Scully Essay

490 Words2 Pages

Scully took over in 1985, and his goal was to push Macs into different markets in order to stabilize Apple’s market share. During the beginning of Scully’s reign, Apple targeted primarily the desktop publishing and education markets. Scully’s success dominated the education sector and regained an 8% worldwide market share. Scully’s troubles began when IBM began dropping the prices of their computers resulting in Apple computers appearing overpriced. Scully decided to devote 9% of sales to research and development (R&D) compared to IBM’s 1% in order to create a low-cost computer that would appeal to the mass market. The results were not what was expected. Due to Apple’s goal to produce a new product every 6-12 months and their high expense cost towards R&D, Apple’s gross margin dropped 34%, ultimately ending Scully’s employment with Apple. My suggestion for Scully would have been to spend less on R&D and continue to focus on the education and desktop publishing sectors. To encourage growth, he should have chosen another niche market and slowly worked towards greater market share. Instead he decided to go head-to-head …show more content…

His decision to cut cost internally by cutting Apple’s workforce by 16% and pushing for internal growth were very troublesome decisions. I’m guessing the morale of the employees diminished resulting in less production and efficiency. For that reason IBM lost interest in their joint venture with Apple, wasting $500 million. Apple ended up losing $69 million in the first quarter of 1996, and Gilbert Amelio was appointed the new CEO. My opinion towards this matter is that often time change alerts employees especially when it threatens their jobs. Apple was always known for their innovative ideas, and without a motivated workforce those innovative ideas ceased to exist, resulting in the failure of the new PC OS and multimedia applications Apple and IBM were working on with each

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