How Apple Creates Long-Term Shareholder Value

Steve Jobs was unique, cut from a different cloth, on a different plane of thinking that set him apart from other CEOs and leaders. Over the past ten years Apple has gone from strength to strength because of his vision, but now that Steve Jobs is gone, can Apple keep it up? I think they can, and I think it’s because the Apple Board knows what drives long-term shareholder value. And you only need to look at the extreme remuneration package that the new CEO Tim Cook has signed up to as proof.

When you look at companies that are delivering great results globally, it’s hard to ignore that many of them are run by the guys that started them. Apple of course, Google, Facebook… all of these are run by the founders. These companies appear driven by the legacy that the founders want to leave behind, and their entire business and decision making process revolves around that, not the current years financial numbers. In short, they are hard-wired to create sustainable value for their business.
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Why does Woolworths spend money advertising Apple’s iPhone?

It’s great to see that Woolworths has finally released an Android App to complement their iPhone App. What I can’t understand is why they’ve already spent a mountain of money advertising the iPhone App when the Android App wasn’t ready. They had Amanda Keller advertising the App on TV as well as bus-shelter billboards and they plastered all their stores with the iPhone only message.

Why spend so much money doing blanket advertising for a product that only iPhone users can access? Steve Jobs must be wringing his hands in glee at the free plug their product is getting.

In my experience I’ve learnt that if you push your iPhone App to all users (not just iPhone users) you actually alienate non-iPhone users, who start getting angry about your brand. A much better solution, is to have iPhone, Android and a basic web app sorted, then go with a broader message about how your product is “available on your smartphone now”. Any other approach is wasteful and in fact, damaging to your brand. If I was on the Woolie’s Board I’d be asking for the Marketing Budget to be cut.

In the meantime, congrats on the App Woolies, it’s actually pretty good.