Apple Inc. and Innovation

Apple Inc. and Innovation

Important Note: This thesis is written by a Tamil Student. So you can get clarification in terms of Tamil Language. We are posting this thesis to help Tamil students who do their Masters in Business. Send me a email request if you want the table or picture or even some content or part that is missing in this thesis. This thesis for educational purpose so all writings are purely assumptions.
 
TABLE OF CONTENTS
1.0.       INTRODUCTION
1.1.       Apple in 1980’s
1.2.       Apple in 1990’s
1.3.       Apple in 2000’s
2.0.       FACTORS THAT CONTRIBUTED TO APPLE’S INNOVATION SUCCESS
2.1.       Firm-Related Factors
2.2.       Project-Related Factors
2.3.       Product-Related Factors
2.4.       Market-Related Factors
3.0.       INNOVATION STIMULUS AT APPLE
3.1.       Leadership
3.2.       People Management
3.3.       Creativity Management
4.0.       ORGANISATIONAL REQUIREMENTS AND CHARACTERISTICS OF APPLE THAT FACILITATED INNOVATION PROCESS
4.1.       Growth orientation
4.2.       Acceptance of Risks
4.3.       Vigilance and External Links
5.0.       CONCLUSION
REFERENCES
LIST OF FIGURESFigure 1: The rise and fall and rise of Apple (Trott 2008)
Figure 2: Critical factors for innovative success (van der Panne, van Beers & Kleinknecht 2003)
Figure 3: Relationship between innovation stimulus & innovation capacity and innovation capacity & innovation performance (Prajogo & Ahmed 2006)

1.0.        INTRODUCTION
Apple was founded by two college dropouts Steve Wozniak and Steve Jobs in the year 1976.  (Hoover’s, Inc. 2011).  The garage built Apple I was the first product of apple Inc.  This Apple I do not have the casing and peripherals like display & keyboard later in 1977 they added the peripheral which was a huge success (Hoover’s Inc. 2011).
 
1.1.         Apple in 1980’s
In 1983 one of the founders Steve Wozniak left apple and PepsiCo’s John Sculley was chosen as the President of Apple. In 1984 Macintosh was introduced which helped apple to rebound from its failure. Then again in 1985 another founder of Apple Steve Jobs left the apple and founded NeXT.  Mac Plus was introduced in 1986 but in late 1908’s Apple faced severe competition from Microsoft’s windows operating system which had a GUI features similar to that of Apple product for which Apple sued Microsoft (Hoover’s Inc. 2011). 
 
Figure 1: The rise and fall and rise of Apple (Trott 2008)
 
1.2.         Apple in 1990’s
In 1993 Apple introduced the handheld computer, Newton which was not a success so the profit of the Apple started to decrease as a reflection of this issue John Sculley left Apple in 1996 Apple hired Gilbert Amelio, the former CEO of National Semiconductor. In 1997 Apple bought NeXT and Steve Jobs replaced Gilbert Amelio. In 1998 Apple introduced iMac and stopped making handheld computer, Newton. In 1999 by the introduction of iBook Apple entered portable computing (Hoover’s Inc. 2011).
 
1.3.         Apple in 2000’s
 In 2001 Apple made upgrades to its existing product and introduced the Apple’s block buster portable music player, iPod. In 2005 Apple started using Intel processors and introduced the iPod nano, the miniature version of iPod. Apple introduced iTV in 2006 and iPhone in 2007 (Hoover’s Inc. 2011).
 
2.0.        FACTORS THAT CONTRIBUTED TO APPLE’S INNOVATION SUCCESS
 
Figure 2: Critical factors for innovative success (van der Panne, van Beers & Kleinknecht 2003)
 
From the above diagram we see that success depends on the technological viability and commercial viability. The technological viability is affected by project-related factors & firm-related factors while commercial viability depends on product-related factors & market related factors. These four factors will be discussed below.  
 
2.1.         Firm-Related Factors
As mentioned above firm-related factors affect the technological viability which inturn contributes to the success. The firm related factors are experience of the firm, strategy of the firm in innovation, firms R&D team & its intensity and finally organizational heritage and structure (van der Panne, van Beers & Kleinknecht 2003).
 
In case of apple’s organizational heritage and their R&D intensity the day one they have been innovative they where the one who introduced the operating system with mouse and later today they where the one who made the PC extremely portable (iPad) by using motion less hard disk, touch screen keyboard though the Tablet PC introduced before iPad used the same technology but you can see a lot of difference between a Tablet PC and iPad.
 
Apple’s R&D team and their strategy towards innovation not just using the technology invented by them, they try to take all kinds of ideas from the outside world and try to modify and present in their own way the iPad, iPhone and iPod are the best examples where ideas are taken are stitched and presented in the Apple’s way. Apple always produces products which will some time have addictive applications and most useful apps which will make people to buy even though when they are little bit costly. 
 
2.2.         Project-Related Factors
The project-related factors like organization’s style in management, products complementarity and top management support for the ideas, research, etc affect the technological viability which is the contributer for the success (van der Panne, van Beers & Kleinknecht 2003).  Apple’s products are complementing each other for example for downloading songs or music to the iPod the software used is iTunes.  The management style and the top management support is such that they heavily support the innovation and always gives ears to all the employees of Apple incase if they have any innovative idea. 
 
2.3.         Product-Related Factors
The product-related factors like product price & quality in comparison to similar products, product uniqueness and the technological advancement used in the products affects the commercial viability which is another major contributor for success (van der Panne, van Beers & Kleinknecht 2003).  Apple’s product uniqueness and technological advancement are the main criteria that give the edge for the apple’s products in the market. In case of iPhone the touch screen feature is extremely well developed because Apple have lot of experience in touch screen from it product, Newton. The apps in the iPhone are becoming addictive. Even though the iPhone battery dies down sooner when compared to that of the long standing batteries of Nokia phones but still people opt for iPhone is mainly because of its uniqueness and technological advancement.
 
2.4.         Market-Related Factors
The market related factors are timing of product entry into market, pressure from competitors, marketing technology and concentration of target market (van der Panne, van Beers & Kleinknecht 2003).  In case of Apple it has broke the concept of timing of market entry because iPhone entry into the market was late but still it was a huge success. Apple gives the laptop at very low cost to Students thus making them used to Apple product and thus ensuring to some extent that they will in future to will by the Apple products. Competition from the competitors for Apple is very low because of the uniqueness of Apple product but still many major electronics brand try to make the same type of model of Apple products for example Samsung introduced Omni series as a competition product for  the iPhone. But still the iPhone is doing good even though the Omni series is low cost and has many features of iPhone it is not only because of the uniqueness of the product but also the marketing techniques used by the iPhone.
 
3.0.        INNOVATION STIMULUS AT APPLE
A study shows that there is a strong relationship between innovation stimulus and innovation capacity, the innovation capacity inturn has a good relationship with innovation performance. This study did not find any strong relationship between the innovation performance and innovation stimulus. The factors affecting the innovation stimulus are leadership, creativity management, people management and knowledge management (Prajogo & Ahmed 2006).
 
Figure 3: Relationship between innovation stimulus & innovation capacity and innovation capacity & innovation performance (Prajogo & Ahmed 2006).
 
3.1.         Leadership
Apple has a very good leadership. The way in which it operates has a created in the image in the public that it is more than a profit making firm. Before Steve Jobs returned to Apple it was in a financial crisis. After Steve Jobs returning till today Apple made huge profits by innovating more new products like iPod, iPhone and now the iPad. The made firm’s top management made sure that the products sold only out of its uniqueness. The leadership has maintained a high level of secrecy about their firm information like Pepsi and Coke do. The leadership was keen in opening Apple stores worldwide and giving the stores a superior looks. Apple’s innovation success is due to Steve Jobs policies like sell dreams not products, say no to thousand things, create insanely great experience and dent around the universe. Jobs invented and masterfully marketed ever-sleeker gadgets that transformed everyday technology, from the personal computer to the iPod and iPhone.
3.2.         People Management
One of the important reasons for Apple’s innovation is its great role in the people management. Apple introduced some scheme for its employees to get loans which allowed loaning items for one year after that they can own the item. Apple made working environment such that it reduces the stress which is one of the greatest problems in American firms and it is also a silent killer. Apple also took a keen interest in activities so that its employees are treated well.  As the Apple made huge profits so do their employees benefited a lot.
 
3.3.         Creativity Management
Creativity is the life line for sustaining any firm in the long run and also for the success of Apple creativity management has played a great role. Apple ranks top in the creativity and Apple maintained its creativity from the day one whether it is in the operating system or in the mobile phone or digital music player. iPod, iPod Nano, iPhone, iPad design reflects Apple’s extreme talent in creativity management.  It is the creativity management has given the Apple its competitive advantage. Because of its creativity management Apple is able to satisfy continuously its customers.
 
4.0.        ORGANISATIONAL REQUIREMENTS AND CHARACTERISTICS OF APPLE THAT FACILITATED INNOVATION PROCESS
There are  ten organizational characters that facilitate innovation process they are organization’s heritage and experience in innovation, the organizations commitment to technology & its R&D intensity, organizations level of acceptance of risks, organizations receptivity, organizations space creation for creativity, organization’s strategy in innovation, organization’s capability in diverse range of skills, organization’s cross-functional co-operation & its co-ordination with organizational structure, organization’s vigilance & its external links and organization’s growth orientation (Trott 2008).   
 
4.1.         Growth orientation
Growth orientation is a long-time process not a short-term profit process. Apple had a strong view of growing steadily rather than attaining great heights and soon falling down to depths that are not recoverable it was possible by its management and after the return of Steve Jobs Apple seeing steady growth.
 
4.2.         Acceptance of Risks
Apple is in the market which has high competition which means more risks. Whenever Apple innovates, produces and releases the product in the market they are immediately imitated by the competitors. For example as said before immediately after the phone’s huge success Samsung imitated by introducing the Omni series which is half the price of iPhone.
 
4.3.         Vigilance and External Links
Vigilance is the organizations awareness in terms of threats and opportunities.  This vigilance sometimes needs the continuous eyeing of the all employees by the top management (Trott 2008).   The threats from the competitors and opportunities should be faced by the strengths of the organization.
 
5.0.        CONCLUSION
Apple Inc. is already the envy of the technology world. Apple currently ranks the top in innovation to be a market leader it is necessary for the Apple to maintain its current ranking in the innovation. Apple is in the field of telecommunication and computers so it will be facing more competition as the days to come in so to shield any threat the innovation is the best shield. Currently Apple is strongly holding and wisely holding the shield, innovation because of which it is now a market leader. 
 
REFERENCES
Hoover’s Inc. 2011, Apple Inc., viewed on 7 September 2011,
http://proquest.umi.com/pqdweb?RQT=309&Fmt=7&did=168155261&SrchMode=10&VName=PQD&VType=PQD&VInst=PROD&&TS=1315583481&clientId=15653
 
Prajogo, D.l. & Ahmed, P.K. 2006, ‘Relationships between innovation stimulus, innovation
capacity and innovation performance’, R&D Management, vol. 36, no.5, pp. 499-515.
 
Trott, P 2008, Innovation Management and New Product Development, 4th edn, Pearson Education Limited, England.
 
van der Panne, G, van Beers, C & Kleinknecht, A 2003, ‘Success and failure of innovation : a review of the literature’, International Journal of Innovation Management, vol. 7, no. 3, pp. 309- 338.