How did Steve Jobs save Apple using the Law of Elimination?
Rajesh Srinivasan
Founder - Mindful Marketing | Strategy Consultant | 3x Author | Keynote Speaker | Reach out for your Strategic Planning sessions.
In 1997, when Steve Jobs took over as Apple's CEO, the company was staring at bankruptcy.
Apple's product portfolio was over-burdened with dozens of models with no clear product differentiation.
It faced stiff competition.
On February 5, 1996, BusinessWeek put Apple’s famous logo on its cover to demonstrate its lead story: “The Fall of an American Icon.”
In short, Apple was in mess in 1996.
Many analysts who observed the situation believed Steve Jobs would develop and launch advanced products to save Apple.
But, he did something unexpected.
Jobs cut all of the desktop models—there were fifteen—back to one.
He cut all portable and handheld models back to one laptop.
He completely laid off all the printers and other peripherals.
He cut development engineers, software development, distributors and five of the company’s six national retailers.
He cut out virtually all manufacturing, moving it offshore to Taiwan.
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With a simpler product line manufactured in Asia, he slashed the total inventory by more than 80 per cent.
A new Web store sold Apple’s products directly to consumers, cutting out distributors and dealers.
By simplifying the product portfolio, Steve Jobs not only saved Apple from the brink of bankruptcy but also brought a renewed focus and energy back.
He then concentrated on developing breakthrough products like the Ipad and iPhone that changed Apple's destiny.
During the mastermind sessions, I usually tell this story to my clients to convey the significance of simplification.
It is not the addition but the subtraction that matters the most.
I call this the Law of Elimination.
It helps you to focus on the VITAL FEW things and ignore the TRIVIAL MANY.
Remember, with a simplified and differentiated product portfolio, Apple is one of the most profitable consumer-facing companies in the world.
It reported $20.6B Profit on $83.4B Revenue (on October 2021).
Want to simplify your marketing strategy, write to me at reachme@rajeshsrinivasan.com
Rajesh Srinivasan, Marketing Strategy Consultant | Author | Tedx Speaker
Managing Director at Abdul Latif Jameel Global Consumer Electronics Distribution | FMCG | Europe, Middle East, South Asia | Commercial Operations Expert | P&L Management | High Performance Leader & Influencer
2yWhat an amazing analogy. It's not always multiple or huge number of products which can lead to high market share or profitability. But a focused and good product can drive market share and profitability
Former Managing Director & Country Manager - India & Sri Lanka at Hohenstein India Pvt. Ltd. "Man of Excellence" awardee from Indian Achievers Forum
2yThis has a very useful practical lesson for all companies aspiring to be successful. Companies must "minimize" the suffering (reduce or optimize the negatives)and then, secondarily, maximize the desired outcomes. Great share Rajeshji.👏👏👏
Driving Solutions and Growth at HARMAN (Samsung) | Storyteller | Top Leadership Voice💡| Mentor & Jury | Indian Achievers' Awardee | Truck Driver🚚
2yWell articulated Rajesh. This is definitely a go-to business case study for “The law of Elimination”. Major businesses focus on diversification just to grow their revenue but miserably fail, identifying one product line and being a top notch product can definitely gain a lof of credibility from customers and differentiate you from crowd. And obviously the revenue numbers will follow. But making this decision is the key and people like you with experience can factually get that right for businesses.