Apples Effective Knowledge Management - Case Study Example

Knowledge Management Student’s Name Institutional Affiliation Date Introduction Ever since the establishment of the Apple Inc. by Steve Jobs and Steve Wozniak in 1976, the company has witnessed unparalleled success in the development of computers and smartphones. The adoption of effective marketing strategies and the effective technological innovations has seen the company succeed in the electronics sector. The availability of a distinct market for small computers and the development of consumer-friendly products have had an immense contribution to the success of the firm. The Apple Inc. concentrates primarily on the personal computer industry. It also produces other products in the electronics sector such as portable digital media devices, mobile phones, and the related accessories and peripherals. The company also designs software applications that run on its devices (Mrak-Blumberg, 2006). The company sells its products worldwide through its online stores, retail stores, third-party network carriers, direct sales force, retailers, wholesalers, and value-added resellers. The products developed by the firm encompass iPhones, iPods, iPad, Mac, Apple TV, a portfolio of related software applications, support services, accessories, iCloud and the OSX and iOS operating systems. Knowledge Creation/Acquisition Effective knowledge management plays a significant role to the company’s ability to manage its information resources thus ensuring that it produces products that meet customer needs (Gourlay, 2003). The company utilizes innovation as its principal avenue of creating knowledge through social interaction. The information creation structure consists of highly interactive teams that are responsible for the development of projects. The team consists of individuals that emanate from diverse backgrounds. However, the most important aspect of the team is their ability to maintain daily communications effectively. The information and technological sector necessitates intense daily communication between the professionals of the business enterprise and its clients (Scardamalia, 2004). Therefore, the expertise that the team of professionals have pertaining communicating with the company’s clients impacts tremendously on the ability of the company to source real time information regarding consumer feedback on the functioning of a software application or a product. The necessity of being alert to respond to client feedback also emanated from the fact that the company usually takes the first milestone towards developing a new product; rather than modifying an already existing product. Since customers do not have an initial experience on the newly developed product, it is almost certain that clients may exhibit mixed reactions towards the functioning of the product. Consequently, it is mandatory that the firm should take the necessary steps to integrate the sourced feedback into the product development process so as to develop commodities that yield consumer satisfaction (Nonaka et al. 2003). It is proper to understand that the current step taken by the Apple Company to provide pertinent information regarding the product development processes emanated as a lesson following the lack of an effective communication framework in the development of the Mac personal computer (Rao, 2014). It is evident that the development of the Mac was in destructive relation and in isolation thereby creating an information boundary between the developers and the managers of the company. It is also certain that Steve Jobs, one of the co-founders of the company outsourced professional talent from the already existing technological firms such as Xerox and Hewlett-Packard. Apparently, the individuals brought in significant information regarding the techniques of product development that the companies used. Steve Jobs created a vision that required the developers to develop products that would “dent” the world market thus attract consumers towards purchasing the products of the company. As a result, the firm utilized the information provided by the outsourced professionals to develop products that would be appealing to the eyes of the consumer thus enabling the company to attain competitive advantage at a faster rate and win the global market (Nonaka & Kennedy, 1991). The conceptualization of the difficult aspects of the project entailed the utility of analogies and metaphors. For instance, the firm equated the development of the Mac computer to a bicycle project thus coding the process “the bicycle of personal computers”. The other metaphors encompass the crankless Volkswagen that referred to personal computers developed for the quality-conscious consumer, the Telephone of the 1980s, and the Cuisinart. The development of products that would have an impact on the life of everyone was the basis for the utility of the metaphors. Therefore, it is proper to state that the slogans adopted by the company aimed at increasing the scope of the company to ascertain that it concentrated on developing products that would attract the global market rather than just focusing on the domestic market. In essence, it is proper to state that the Apple Company utilized innovation management as the principal strategy of sourcing its information (Ruef & Martin, 2002). Knowledge Retention Apparently, the ability of any firm to maintain its professional workforce guarantees the retention of the knowledge used to develop its products or offer services that meet customer anticipations (Conner & Gerring, 2002). The Apple Inc. suffices to be a firm that has specialized in innovation management resulting in the development of new products using new technology (Johnson et al. 2012). Therefore, it is the responsibility of the company through its human resource department to ensure that the developed products rival companies do not have any access to its information resources since such an access may contribute towards the loss of competitive advantage on the part of the company. The company has performed tremendously in customer support services and customer satisfaction. The final result of its customer-centered product development initiatives is the ultimate success of the company in the global market (Kane & Rohwedder, 2012). Following the realization that the contact center agents play a crucial role towards customer satisfaction, the company has invested significantly in training the agents to guarantee the effective provision of customer services. Therefore, rather than striving to conceal pertinent information concerning product development, the company trains its agents in product introduction, product utilization, cross-product functionality, product integration and the implementation of the product. Fluency is a mandatory requirement and qualification for Apple’s global customer care agents. The agents should be able to respond to customer inquiries and concerns soon after their placement to ascertain customer satisfaction. Therefore, the firm ensures that its agents have the necessary skills pertaining the product. There is a continuous agent training and deployment exercise that has resulted in the ability of the company to train and deploy approximately 8,000 customer agents to its global distribution centers on an annual basis (Apple Inc. 2008). In the quest to ensure that the agents retain their knowledge pertaining the critical aspects of product launch and integration into the market, the company conducts regular assessment tests on an annual basis. The assessment is pertinent towards ascertaining that the firm’s agents have retained their skills regarding the proper handling of customers. Moreover, the assessment tests whether the agents exercise the already acquire skills or not. Attaining minimal levels of employee turn-over is one of the objectives that has seen the firm implement on-the-job training and development as a career development initiative. The introduction of rewards programs and remunerative salary packages also play a pivotal role towards retaining the company’s employees comprising of both the contact center agents and the workers involved in product development. It is also proper to state that the firm has trained its employees in multilingual environments thus integrating cultural learning in their skills. Consequently, other firms may opt to prey on such employees to utilize their skills in the introduction and marketing of rival products to Apple’s disadvantage. Knowledge Sharing Apple Inc. understands that recurrent innovation at the workplace plays a pivotal role towards maintaining its already acquired competitive advantage in the industry. As a way of sharing its knowledge, the company advocates for the participation of all its stakeholders in its knowledge management practices (Islam, 2012). Furthermore, the firm has enhanced workplace collaboration and the collaboration between its contact center agents and customers as a way of sharing knowledge. Finally, the firm also utilizes experimentation in its knowledge management practices. In order to ascertain knowledge sharing, Apple Inc. has created a favorable environment to enhance the comfort of its customers. It is evident that the office environment of the firm presents a friendly atmosphere that is ready for the transfer of information among all the interested stakeholders. The firm has also developed modern and interesting office designs that create a favorable social environment for its customers, workers and other stakeholders that have interest in its information. The multinational corporation has gone into the extent of hiring guest lecturers to heighten the significance of knowledge management to the firm. As a result, the lecturers ensure that the employees of the firm embrace knowledge sharing in all the affairs of the company. The firm believes that the integration of all pertinent knowledge in product development, customer relationship, and human resource management among other critical aspects of the firm is pertinent to its success in the competitive market. The effective communication and cooperation exhibited by the employees of the firm that have diverse ethnic backgrounds is one of the contributors to the efficient sharing of knowledge in the firm. Intense communication is a milestone towards the improvement of information sharing thereby enabling the company to develop innovative products. The office premises also contain common areas that enable the smooth dissemination and sharing of knowledge. Apple Inc. understands that the customer is the most important asset of the company since customer satisfaction is a basic necessity for competitive advantage and the ultimate success of the company. Keeping the understanding in mind, the company advocates for information sharing particularly during the product design phase. It understands that integrating the available information regarding customer feedback regarding an already developed product and their current expectations about the new product is key towards developing a product that meets customer needs. In fact, the firm goes beyond customer expectations to develop products that appeal to customers. The company has also developed rooms that the product development teams utilize in sharing significant product information based on the already gathered information. It is also evident that the firm has developed recreation rooms to achieve the objective of information sharing among its product development teams. Apparently, recreation rooms enhance employee relaxation thus making them feel at home. By so doing, the members of the product development teams develop a positive attitude towards their roles at the workplace. The final result of the positive attitude is a positive workplace culture that heightens the dedication of the employees towards developing innovative products that meet and even surpass customer expectations. It is also certain that a positive culture is one of the basic requirements of knowledge sharing. Consequently, the culture is responsible for the success of the company in its knowledge management and product development endeavors. Moreover, the firm does not encounter any barriers in the process of implementing knowledge management strategies since all the members have a common purpose thus support the strategies unanimously. Since the firm develops innovative products that customers have never met before, it does not conduct market research regarding the particular apps that the products should contain. Instead of conducting a market research, the firm relies on the convictions of the product development teams in the development of new products. Using individual convictions about a product implies that there exists proper knowledge management strategies to ensure the effective integration of the individual worker ideas in the product development process. The firm has also realized that it is imperative to trust the individual opinions, values and philosophies of its product developers to enable the development of products that expectations of the millions of its global customers. Strengths and Weaknesses Strengths There are four major strengths of the Apple Company: global presence, brand image, synergistic portfolio and strong media content. Global Presence The global presence of the company spans the Americas, Europe, the Middle East, Africa, and Asia Pacific. The United States is the firm’s domestic market. However, the company’s global sales from other markets other than the USA constitutes approximately 50% of its total sales. The company’s strong global presence has guaranteed a constant growth in its revenue. As a result, the company’s revenue has stood above the industry average as a result of the growth of its global markets. For instance, in the five-year period that lasted between 2001 and 2005, the company realized a 4.2% increase in its operating profit margin at a period when the industry average stood at 2.8%. Therefore, it is evident that the strong operating profit margin was responsible for the increase in the market position of the company as well as yielding investor confidence (Jinjin, 2013). The heightened global presence of the company emanated from the fact that the company developed quality innovative products that meet the needs of customers. Therefore, the customers share their knowledge and experience regarding the use of the company’s products with other people thus widening the market for the company. Brand Image It is evident that consumers regard Apple products highly as compared to the other competing brands. The global presence of the company’s products has also guaranteed brand recognition and brand awareness in all the markets covered by the company. As a strategy of enhancing its sales and differentiating the product offering, Apple Inc. leverages its brand image. Apparently, the strength of the company’s brand image plays a pivotal role in acting as a barrier to entry for other firms that intend to develop rival products. The strength of the brand has also enabled the company to adopt premium pricing for its high end iPad and iMac products thus enabling it to have a competitive advantage over other brands such as Sony, Samsung and IBM. Certainly, knowledge management played a crucial role towards developing quality and innovative products that meet customer needs (Lovrekovic, 2013). A portfolio of synergy The range for the company’s products encompass the design and manufacture of personal computers, iPads, iPhones, and other related software, networking solutions and peripherals. The company also offers customer services associated with the handling of the products besides engaging in the marketing of the products to its diverse global markets. Moreover, Apple Inc. designs and markets portable media devices such as iPods and the associated software, services and accessories. The firm also engages in the online distribution of music videos, third-party videos, television shows, short films, and audio books. Apparently, the firm has a wide portfolio of products that enables it to reduce its dependency on a single line of product. The final result of the widened product portfolio is a reduction in its exposure to business risk thus enabling the firm to realize profits even in the event that one line of product performs poorly. The enhancement of cross-selling opportunity suffices to be the other advantage associated with the wide product portfolio. Strong Media Content The company as witnessed tremendous growth following the launch of the iPod and online music store. Of late, the iPhone has also turned out to be one of the best performing product lines of the company (Worstall, 2012). For instance, the number of iTunes downloads surpassed one billion in 2006. Since the users downloaded the music from the iTunes music store legally, the firm realized substantial returns from the downloaded media. The firm also leveraged its iTunes’ position online as a strategy of increasing the number of downloads. It is evident that the strong media content guaranteed the favorable position of the company’s iTunes music store as compared to the existing media players. Weaknesses Dependency for Key Components The firm faces a supply risk associated with the supply of particular components. For instance, the company depended on IBM to supply its PowerPC G5 processor used in the development of the Xserve, iMac G5 and PowerMac products. Moreover, the firm also relied on Freescale as the single provider of its G4 processors used to develop portable products, eMac and Mac mini. The overreliance on a sole provider of critical components such as processors may impact negatively on the readiness of the company’s products to meet the existing customer as was the case in 2005 following the design failure of the G5 processors. At the time, the company delayed the shipment of its products thereby impacting adversely on the image of the company pertaining its ability to meet customer orders within the stated deadline. Recommendations for Improvement Position power, product power and process power are the essential determinants of the continued success of a company. The ability of the company to develop innovative products and market them successfully is largely responsible for the success of the company over the last decade. Therefore, it is proper to refer to attribute the ongoing success of the company to its product and position power. However, in order for the company to continue witnessing an increase in its performance and market dominance, it is imperative that the firm should also encompass devise effective ways of acquiring process power. The company should also increase its research and design funding to ascertain that it is always on the fore front in the development of its products so as to maintain the existing product and market power. Continuous research and design also ensures that the company is in a position of developing innovative products ahead of its competitors. The next challenge entails increasing the availability of its products on the global market. The opening of retail stores played a significant role in enhancing consumer access to the company’s products keeping in mind the fact that consumers need to have experience of the products prior to making purchases. Therefore, the firm should increase its aggressiveness regarding the opening of additional distribution centers to enhance the access of its products to different parts of the world. As a way of enhancing knowledge sharing regarding the performance and features of the company’s products, it is also proper for the company to lease or rent some of its products such as personal computers for a limited period to create customer awareness about the product. Since Apple products boast of high quality, fast speed processors and innovative applications, it is evident that leasing the products will lure more customers into purchasing the product as is the case with a car test-drive. Conclusion Just as is the case with other innovative companies, the Apple Inc. should develop and implement effective knowledge management strategies to ascertain the proper sharing of information between its product developers and customer contact agents. The company creates its information through social interaction with its customers. Apparently, customer feedback regarding a previous product is the starting point for the development of the succeeding product. Effective knowledge management practices also guarantee cooperation and understanding among the product developers thus enabling them to integrate individual convictions into the development of a single product. The strengths of the company include its global presence, brand image, portfolio of synergy and the strong media content. Overreliance on a single producer of critical components is the main weakness of the firm. Apple Inc. should concentrate on gaining process power besides the already existing product power and position power to guarantee its continued success in the market. References Apple Inc. (2008). Strategic Learning Solutions: Case Study Assessment. Central Knowledge Inc. Gering, J., & Conner, J. (2002). A strategic approach to employee retention. 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