Managing Innovation, Creativity & Change - Apple Inc - Case Study Example

Managing innovation, creativity & change Contents Contents 2 Introduction 3 Discussion 4 Underlying factors that makes the organization innovative 4 Main challenges faced by the organization over the next five years 9 Conclusion 11 References 12 Introduction Apple Inc having its headquarters in California is a multinational corporation of America. The company was invented in the year 1976 by stalwarts like Steve Jobs, Steve Wozniak and Ronald Wayne. The company was originally designed with the motive of selling personal computers. The company operates in the industry of computer hardware, consumer electronics, computer software and digital distribution. The original name of the company at the time of incorporation was Apple Computer, Inc which was later modified in the year 1977 to Apple Inc. The company adopts the best of innovative business strategy to develop, design and sell computer software, personal computers and consumer electronics. The hardware products of the company are Mac line computers, iPhone Smartphone, iPod media player, and tablet. The information technology industry has become very competitive in the recent years. The new technological innovations has made all the companies and even Apple to constantly upgrade its services so as to stay at pace with the changing business environment. The company is regarded as the second largest firm in the information technology sector in terms of revenue just after Samsung Electronics and is the third largest firm which manufactures mobiles just after Nokia and Samsung. The company has its own 406 retail stores across the globe and offers the most innovative product line for its customers. The company in the year 2008 was regarded as the most admired company in the United States. The company has been very successful over the years and has been known for its strict accountability and innovative organizational culture that prevails in the system. Discussion Underlying factors that makes the organization innovative Apple has been over the years designed its strategies on basis of desires of people and on the feasibility of the new technology that it plans to incorporate in its business operations. There are many companies which have been able to create and manage innovative approaches but Apple Inc has been able to sustain this over the years. Innovation does not only mean products or services that are delivered by a company but it highlights the organizational culture, business strategies, research and development process, and the various strategies that are adopted by a company in order to stay ahead of the competition. Apple is the most appropriate choice in this context as it follows the most innovative business model for its operations as stated below- (Boxall and Purcell, 2003, p.99) The innovative business model that is so adopted by the company states that that Apple do not follow functional innovation that is through their products or services but even follows other form of innovation such as process and people. The company takes into account the desires of their people working in the organization and aligns the business activities to it which results into emotional innovation on the other hand it takes into account feasibility of the technological elements that is opts for its business operations and even the interests of its people. This model clearly depicts that the company is the best example of innovation. Through its business strategy the company has been able to stay ahead of the other players in terms of innovation in the information technology industry (Slack, Chambers and Johnston, 2001, pp. 77-78). Products or services that are offered by Apple Inc are just the possible examples of innovation that can be possessed by a company. The actual underlying factors that makes an organization truly innovative is the organization structure and culture, leadership qualities exhibited in the organization, the need that is identified by the company to stay ahead in the competitive environment, analysis of the market place and other key players, and the amount that is spend and the approach that is undertaken by a company in department of research and development (Burns, 2012, pp. 116-117). The first underlying factor that makes the company innovative is the existence of innovative leadership traits and qualities. Apple as a company excels in whatever tasks it undertakes and is considered to be the best company in terms of providing service across the globe. The company considers itself not to be in product business but it identifies itself as a business platform which can only be sustained through innovative leadership qualities. As a leader Steve Jobs has always been regarded as the most charismatic leader in the industry (Bonnici, 2011, pp. 105-106). He has been able to design products and even motivated the other team members to follow the strategy that was invented by him because he was able to make the team members aligned to the common objective of the organization. There is still a question in the minds of people that after such a charismatic leader the organization is operating well and it is simply because of yet another and talented leader who took charge of Apple Inc that is Tim Cook (Daenzer, 2009, pp. 45-46). In midst of the highly competitive market place Tim Cook has been able to involve all his team members in strategic planning and decision making so that the company can sustain amongst the other players in the industry. As a leader Tim Cook follows a democratic leadership style in most of the situations where he encourages the other team mates to share their innovative ideas and opinions that would be beneficial for the company (Kano, 2013, pp. 145-146). The leadership style that is adopted by Tim Cook changes over time as he adopt to different styles of leadership as per the situation, for instance he prefers to make quick strategic moves in crisis situation instead of involving other team members as such situation demands for fast decision making. Innovation in the present scenario is not just associated with bringing new products to the market but it is majorly linked with bringing products in the most social way that can be appealing to the market (Jenster, Hayes and Smith, 2005, pp. 134-135). The main principles that are followed by the leaders of this organization are aligned towards analyzing the root cause of problem and then eliminating it with the support of the whole team. The leader Tim Cook encourages wild ideas from his team mates and he believes that this is the way through which the members can feel an ownership and even such diverse ideas can be beneficial for the company as it has been over the years. He even bases his judgment for the other fellow members on ethical rules and not any kind of biasness and this has made the members of the organization to be highly motivated and perform above the mark (Northouse, 2012, pp.112-113). The other leadership skill that makes the organization innovative is staying focused, as there is no such aspect that deviate the leader from the main goal. The organization culture that prevails in Apple Inc is also one of the underlying factors that drive innovation at the company. The culture of the company stated to be passionate towards new product development and also to be open minded towards accepting new opportunities as well as challenges (Aaker, 2001, pp. 104-105). The culture of the company was more inclined towards performing well, working hard under business ethics and at the same time having fun at work. The company has always tried to establish a more creative environment and it even focused on not designing any form of hierarchical or formal organizational structure but was more prone towards flat organizational structure that indicated a result driven approach and had proved to be very much advantageous for the company over the years. In the initial stages though the company was strictly ruled under the guidance and control of Steve Jobs but talent and creativity has always been appreciated by the company (Sadler, 2003, pp. 90-91). The major expense of the company over the years has been in fields of research and development. The expense in this field would continue to grow as stated by the company simply because of rapid innovations and new players who are emerging in the market place. The company has spent about $4.5 billion in its research and development so as to remain innovative in the industry. The figure given below reflects the spending of the company in research and development- (Steers, 2006, p. 82) The company believes that it needs to spend considerable amount in its research and development over the years mainly because this is one of the underlying measures that can keep an organization innovative, is responsible for future growth, and even for sustaining its position in the market place. However the net sales of the company are relatively high that has made the company achieve a positive cash flow position and maintain its huge expenses in its research and development (Newall and Lagnado, 2007, pp. 66-67). As per the corporate strategy of the company research and development is the major aspect that keeps Apple Inc in a competitive position over the years. The other underlying factor that helps to create innovation in an organization is technology. Apple Inc has been able to design a complete platform for the developers. The company provides a complete ecosystem in which the operating systems, development tools, and hardware are designed in such a fashion that they can work together in a seamless fashion and enables to create more apps. The technologies of the company comprises of iCloud, iOS, Xcode developer tools, OS X etc. which do not only provides an advanced form of technology to its users and also takes into consideration the user friendly aspect of such designs. Technology has always been the supporting pillar for the company that has made the company to achieve a competitive position in the market and it has also facilitated the company to generate more revenues through its innovative technologies (Ulwick, 2005, pp. 56-57). The last underlying factor that makes the company innovative is the levels of competition. The industry in which Apple operates is saturated with high levels of competition. In the phone market the major competitors of Apple Inc is Nokia, Samsung, HTC, etc. Its Mac faces a tough competition from the other manufactures such as Dell. However statistics has shown in the phone market segment it has been one of the most profitable developers. The major competition that it faces from is Samsung but in terms of wide variety of operating systems, software’s, etc., there has not been any strong competitor for the company. The low levels of competition states that the company is very innovative may that be through their strategies, corporate culture or value, organizational structure, work process or the services that it renders. Main challenges faced by the organization over the next five years The launch of Apple’s iPod and iPhone into the market was a significant change in the business strategy of the company that was from a safer market comprising of premium priced and innovative products to that of a highly competitive market of electronics. The iPod that was a music player launched by Apple in the year 2007 was a very stylish competitive and premium priced product in the market which encompassed 60% of the total sales across the globe and was even the single largest contributor towards the turnover of the company. The market leader’s strategic decision to launch their phones has laid down serious challenges for the company for the next 5 years. There are no such aspects in the new products that are of iPhones and iPads except the iconic and classic styles that cannot be imitated by the competitors. The competitors of the company in the consumer electronics segment that is of Sony, Panasonic etc., and that of mobile phone market that is Nokia and Samsung can easily march up to the features of the products that are launched by Apple Inc in the coming years. The other players are already capturing the market share of the company by launching same stylish products and that too at a very lower price (Kerr and Tindale, 2004, pp.623-55). This factor is a major challenge for the company in terms of losing its market share as the other players may offer the same facilities as that of its products and that too at a very reasonable price. The new phone that the company has launched that is iPhone 4S has almost the same functionality as that of the earlier products with a marginal difference which indicates that the company is bound to encounter technological challenge in the next 5 years if it do not innovate some new technologies and that too at a faster rate. The market share that is acquired by the iPhones is just 28% in comparison to that of Android phones that constitutes 43% of the total market share which is indeed a very challenging aspect for the company in the next few years in terms of loosing markets share and also lowered profit margins in the market (Kellerman, 2013, pp. 72-74). The company has been able to develop a strong brand image in the market place and amongst its customer base which has innumerably corresponded to an inelastic demand for the products of Apple Inc. However the sales of the company are highly sensitive towards the impeding downturn that can occur in Europe. The company is already facing a leadership transition that may affect the future operations of the company as the company was very much dependent on Steve Jobs, and he was the man who understood the technology, market, its products and demand of the market well (Moon, 2013, pp. 109-110). Hence it would be a major challenge for Tim Cook to carry forward such a vision of the founder and that too in his style of innovative thinking which may pose a serious challenge for the company in the future. The company has been growing rapidly in the market place but in the recent times due to some faulty strategic decisions the company is facing certain headwinds that would affect the business operations of the company in the immediate future. The company needs to adapt itself with the changing business environment and in order to sustain in the industry it needs to position itself or else the next five years would not be a pleasant experience for the company as it would be surrounded by many challenges. Conclusion Apple Inc is considered to be one of the most innovative organizations in the industry. It’s innovations do not only resemble through the products or services that it offers but can also be denoted through the work culture and the kind of business process that is followed by the organization. Over the years the company was controlled by Steve Jobs who possessed the vision and leadership quality that made Apple Inc what it is today. The brand image of the company has developed over the years. The company has been able to align the people desires, business ethics and technological feasibility so that it can establish a market position in the information technology industry. The company has maintained its position as a market leader and even secured high profit margins in the industry. The innovation features are not only observed in the products or services that is offered by the company but also in its business operations, corporate culture, organizational structure and size, leadership qualities, and the importance that the company gives towards the research and development approach. The company through its innovative approaches has been able to remain competitive in the market place but there are certain challenges that are evolving for the company that can pose serious threat to the business operations of Apple Inc in the next five years. References Aaker, D.A. 2001. Developing Business Strategies. UK: Wiley. Bonnici, C. A. 2011. Creating a Successful Leadership Style. United Kingdom: R&L Education Boxall, P. and Purcell, J. 2003. Strategy and Human Resource Management. Basingstoke: Plagrave Burns, J. M. 2012. Leadership. 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