Steve Jobs and Competitive Advantage

I've started reading the Walter Isaacson biography of Jobs this week to try to answer a question on my mind since Mr. Jobs passed away last month: Can Apple sustain its leadership position?


Few can argue that during the past 10 years Apple garnered huge advantages over competitors in three markets: (i) PCs (ii) phones (iii) music players.   We can roughly quantify this advantage via the $60B+ sitting on the company's balance sheet and/or its stock performance from a split-adjusted $4.00 price in 1997 to $400.00 in 2011.  But is it possible that the decisions of one man have had this kind of impact?


My current thinking is that Apple's advantage will erode; and thus, it was Mr. Jobs that enabled the company's success. He excelled tremendously at two basic things, making decisions and understanding customers. And he did this perhaps better than any CEO in history.  What resulted is a business optimized to utilize technology towards customer needs more seamlessly than anything the world had seen before. 


So if Jobs created the competitive advantage, then it is certainly possible that the company did not develop capabilities that can translate into future innovation over time.


In a great piece on strategy building, Heather Fraser, of the heavily design-influenced Rotman School, wrote about Apple's strategic "Activity System" (See page 8). Looking at Apple's capabilities we find a web of interconnected and mutually supporting activities at Apple.  Its not surprising that "Integrated User Experience" sits at the center.  


What Jobs brought to the fold was customer focused user experience, and this is at the center of Apple's success.  Only time will tell if Mr. Jobs successfully institutionalized this in the company.