Launch and Management of Apple Incorporation - Case Study Example

 Abstract When the company was launched in 1976 by Wazniak and job, both were driven by the fact that the novelty of the product (computers) and its utility value outweighed its cost and appeal to the people. The entry of IBM in personal computers dramatically changed the market scenario of the computers and made them popular amongst the middle class that significantly reduced the market share of Apple computers. The leadership initiatives by Steve Jobs in 1997 greatly facilitated the huge transformation of the fortunes of the company. 2007 and 2008 saw gradual decline of the popularity and revenue of Apple products. The key factors were seen to be innovative products not backed by quality, frequent change of leadership and the recessive trends in the economy that had significantly reduced the buying power of the consumers. It is felt that in the fast changing environment of technology and rapid globalization, there is marked convergence of changing preferences across the globe. Therefore, it becomes important for the firms to introduce the product at the right time is crucial but at the same time, the success would also depend on its quality and the pricing. Report to the Management Reference The report is prepared for the management of Apple Inc. so as to identify the issues and problems, analyze them to evolve strategies and recommendations to improve and improvise the performance outcome of the organization’s aims and objectives. Central issues identified and communicated The company had undergone dramatic changes since its inception in 1976. The early success was followed by considerable loss in revenues and market share in 1981. The company’s fortunes catapulted to regain its market position that kept steadily rising till 2008, when the company was again faced with many challenges and slow growth, showing significant loss of revenue. The main problems and issues identified were as follow: The innovative products of the company were not backed by quality and after sales service. There was heavy competition in the market and the company was faced with the challenge of matching innovation with the open system as provided by other companies. The recessive trends in the economy had significantly reduced the buying power of the consumers The ill health of the CEO, Steve Job had also reflected adversely in the market, bringing down its share value. The company’s refusal to redefine its business strategy and continue to have major focus on producing high-end computers for segmented market. The company maintained its proprietary operating system and closely guarded indigenous chip which was increasingly becoming out of sync with the new software and products of other companies. The management seemed to lose its initial focus on innovation and preferred analyzing the current problems to the exclusion of introducing newer products to meet the fast changing demands of the public. There was frequent change of leadership without adequate notice to the public or its various stakeholders. Analysis When the company was launched in 1976 by Wazniak and job, both were driven by the fact that the novelty of the product (computers) and its utility value outweighed its cost and appeal to the people. That was the reason that the Apple products had huge initial success. Later, when IBM and Microsoft came into the field and introduced affordability into the market strategy, Apple Inc was the hardest hit company and showed tremendous decline in profits and plummeting of its market share to 3%. The leadership initiatives by Steve Jobs in 1997 greatly facilitated the huge transformation of the fortunes of the company. The empirical relationship of leaders and the emerging changes are critical for a given situation and therefore, good leadership demands a better informed leader who is capable of taking initiative. He is also able to inculcate confidence in his followers to move forward. Steve Jobs, the new CEO forged alliance with its rival Microsoft and introduced low cost PCs and peripherals which were compatible with window based machines. But the same was not true for the subsequent leaders within the company and the changing strategies in core value system became one of the key factors for the declining fortune. Thus, the key points of analysis can be elaborated as below: The leadership was more concerned with the analysis and solution of current and anticipated problems within the given business parameters with defined goals and objectives. While the company thrived on innovation and research, it was not backed by either operational efficiency or product quality. According to Slater and Narver, markets thrive on the processes of the learning organization which ‘continuously acquire, process, and disseminate throughout the organization knowledge about markets, products, technologies, and business processes’ (Slater and Narver, 1995). The success of the new products considerably depends on the three major factors: timeliness, pricing and quality. New products like iPhone and iPod were faced by low quality of battery, short battery life and serious problems of activation. Competitive pricing is the lifeline in the contemporary environment of cut throat business rivalry. In June, 2007, when first generation iPhone was introduced, with wide ranging features, the cost was not relevant. But within a span of 3 months, when newer generation iPhones with higher capabilities were introduced with lower cost, the company had to backtrack its price lines, resulting in considerable loss of credibility. The company had introduced the iphones at a time, when there was cutting edge competition with low cost handset and influx of smartphones in the market from the emerging new economies like China, Korea, Japan etc. Hence, it is assumed that the initial success of these products were significantly impacted by the low cost smart-phones and other electronic items like MP3/MP4 players, play-stations etc. The company lacks sustainable development strategy and does not take into account the growing concern of the environmentalist across the globe within its products and services. The company lacks effective PR Strategy and has failed to maintain good and robust image of its leaders. The news about the ill health of its CEO, Steve Job was also a key contributor for the fall of its market value. Conclusions Though company’s products are innovative but unfortunately, in the race to win, the company had seemingly lost its perspective of maintaining high quality in its products and services There is need for effective public relation exercise that would boost the falling image of company’s products. Recommendations The most significant aspect of the problem was that the managerial leadership was more concerned with the analysis and solution of concurrent and anticipated problems within the given business parameters with defined goals and objectives. Hence, the wider ramifications of the problems and the emerging new challenges, in the form of new opportunities and threats needs to be considered vital factors for the sustainable development of the organization over time. In the fast changing environment of technology and rapid globalization, there is marked convergence of changing preferences across the globe. Therefore, it becomes important for the firms to introduce the product at the right time is crucial but at the same time, the success would also depend on its quality and the pricing, both of which are difficult to manage because the time and the quality would make the products slightly more expensive. Hence, new product management must include exigencies so that the three factors can collectively be approached to make the product appealing for the people while at the same time, encourage creativity and innovative practices that give a unique perspective to participatory approach of management and employees. Speed and flexibility have become extremely important ingredients for the products so that the organizations can timely and efficiently meet the fast changing preferences of the customers. The new product development requires an integrated approach to creative learning that may result in the development of new products. Slater and Narver (1995) assert that ‘Built-in instability’, ‘multi-learning’ and ‘overlapping development phases’ are three important inputs for the creation process. The company must adopt this strategy to meet the challenges of the time with efficiency, timeliness and creative input. The company needs to diversify its market and product lines to include the market segment that was hitherto left behind. The market strategy of the products involves an in-depth study of the changing preferences of the people and segmentation of the market so that appropriate market strategy for the product can be developed for the identified target customers. The products are thus introduced for the pre-defined customers as per their requirements with competitive pricing. Montgomery has asserted that strategy needs to be dynamic to encompass the changing paradigms of the times (Montgomery, 2008). Indeed, it is not only relevant but essential in the contemporary environment of competitive business. Hence, its market strategy must focus on the buying powers of the common man and make all its products affordable and accessible. The company must incorporate sustainable development as intrinsic part of its business strategy and introduce products that conform to the environmentalists guidelines for protecting, conserving our natural resources. Instead of manufacturing its products in large quantity, it should concentrate on its research and continuously make efforts to develop new technology gadgets with highly attractive and useful features, thus striding ahead of its rivals. Looking at the current environment of recessive trend and highly competitive business across the globe, it would be prudent for the company to diversify its interests and test new approaches by exploiting wide scope of emerging opportunities in developed and under-developed countries. Indeed, good managerial leadership demands a better informed leader who is capable of taking initiative and at the same time, he is also able to inculcate confidence in his people to move forward. As the Sjostrand and Tyrstrup reaffirm ‘leadership is all about managing creativity’. There is urgent need for effective public relation exercise. These are highly pertinent public issues that need to be urgently addressed mainly because the emerging global business environment has become extremely competitive and requires strategic changes which could meet the challenges of the new economic equations. Sandra Oliver has emphasized that ‘public relation decisions involve complex situations at corporate, business units or other stakeholder levels which affect or be affected by many parts of the organizations’ (Oliver, 2001). The following points emphasize the need for it: 1. Public relation campaigns can strengthen company’s position and provide an effective competitive edge over its competitors in business. 2. They are important part of business strategy because they facilitate consistent, accurate and the right message to be communicated to the audience, to investors as well as customers 3. Rapid globalization has necessitated a greater need for advertising and public relation exercises so as to maintain and increase the marketing and sales of the products and services. 4. The fast technological advancement has facilitated wide ranging communication processes that are effective medium of influencing the public opinions that must be used to judiciously popularize the products and services of the company. Reference Marion, Lou; Hattaway, John; and Jackson, Katy Beth. (2008). Apple Inc. Case Study. Montgomery, Cynthia A. (2008). Putting Leadership Back into Strategy. Harvard Business Review, January. Oliver, Sandra. (2001). Public Relation Strategies. Institute of Public relation. Kogan Page. Sjostrand, S and Tyrstrup, M. (2001). Recognized and unrecognized managerial leadership, in invisible management – The social construction of leadership. S Sjostrand, J Sandberg and M Tyrstrup (eds.). Thomson. pp 1-27. Slater, S. and Narver, J.C. (1995). Market orientation and the learning organization. Journal of Marketing, Vol. 5, No. 3, pp.63–74. Read More