Innovation for Global Relationship Management - Apple - Case Study Example

Student Name: Tutor: Title: Innovation for global relationship management Course: Institution: Innovation for global relationship management Executive summary The world experienced among the worst financial crisis following the meltdown in the real estate market in the United States. Many companies experienced negative growth and a lot more collapsed. The IT industry was not spared by the effects of the global financial crisis. Companies that employed competitive advantages in the market ended up surviving despite the harsh circumstances occasioned by the global financial crisis. The market strategy applied by Apple Inc under the leadership of the late Steve Jobs made it possible for the company to post sales growth despite the global financial crisis. The competitive advantages applied by Apple were able to sustain its growth throughout the difficult times. This report discusses the application of IT in business to gain competitive advantage despite the gloom in the economic condition. The introduction broadly introduces the topic of discussion. Apple Inc has been used as a good example of a global business which has applied IT and innovativeness to sustain its growth. The conclusion gives brief recount of the whole topic of discussion. The whole report explores the impact of IT in business and compares explores competitive advantage in order to realize growth. IT was utilized perfectly by Apple in the development of superior brands. Introduction The Global financial crisis had many negative impacts that saw many companies being grounded to a halt. The market shrank and stocks fell. Workers were laid off while some business segments were closed. A company that ensures sustainability was able to maneuver through the effects of the global financial crisis. Government intervention was not enough to curb companies from losing money due to drop sales and increasing debts. The stocks of money companies dropped and potential investors pulled out of deals the last minute. The IT industry was not spared by the impact of the global financial crisis and its aftermath left many companies crippled or struggling to get on to their feet (Gilmore, 2010, p.46). Despite the impact of the global financial crisis, Apple Inc was able to report growth in its sales. The company used innovativeness and creativity in IT to come up with products that appealed to customers even in bad financial times. Innovativeness and technological advancement propelled some of the IT companies into success and they were to sail through the hardship of the global financial crisis. Apple Inc innovativeness and having the right marketing plan helped to sustain its growth despite the hard economic times. The company produced what the customers wanted and released the products into the market at the right time. Apple had a revisionary leader who was able to discern the times ahead and deliver products that customers wanted. A perfect marketing strategy was used to reach to customers ahead of time. The products of the company were received in the market with a lot of excitement. Reflective analysis in business improvements It has been widely used by companies in improving their performance and profitability despite the adverse effects of the global financial crisis. A company has to use IT aptly in order to gain competitive advantage through innovativeness and creativity. To explore the application of IT in realizing competitive advantage Apple Inc has been selected as the best company that can demonstrate how added value can be created through IT resources. The late CEO of Apple Steve Jobs understood what the world wanted before the world even asked for it. His style of management catapulted the company from near collapse in 1997 to one of the world’s greatest technological company (Sadeghi, 2012, p.123). Job’s 13 years reign at Apple, his persistence on perfection of products and their subsequent showmanship of their release into the market resulted into a formidable brand. The Iconic designs of Jonathan Ive have been one of the pillars of success of Apple Inc. through wrapping an electronic product in a sophisticated shell and chic, Apple under the stewardship of Steve Jobs made style to be an important value and make the competitors try to catch up. Apple offering simplicity is what has defined the company. Apple demonstrated its shrewdness through customer focus, strategic vision, resources and capabilities, and quality focus. While other companies were having their sales choked by the impact of the financial crisis, Apple registered growth in the sales of its products. The branding strategy applied by Apple resulted into positive returns. Close to half of computer sales via its retail channel are reported to be people who are new to Macintosh. The margins and sales of the company have been growing steadily since 2006. Apple has reported some of the best quarterly financial results. The company was the most valuable when its price of share went beyond $500 per share and its market capitalization exceeded that of oil company Exxon which had previously help the admirable position (Gilmore, 2010, p.234-7). Leveraging iPhod success, Apple went ahead and launched the iPhone in July of 2007. This event was meant to extend the brand. The marketing efforts by Apple prior to the global financial crisis in 2008 were superb. In 2007, highly anticipated products were launched into the market. Apple extended its production into the mobile handset market. By July 2008 the 3G iPhone release buzz occasioned above one million units being sold just in the first three days following its release in about twenty countries across the globe. This success was replicated in 2010 following the launch of iPad tablet computer (Nanto, 2010, p.94). The success continued the following year in March following the release of iPad 2 into the market where one million units were sold barely in twenty four hours. It should be noted that Apple tremendous performance was witnessed during the period when the world witnessed one of the world financial crisis that saw many businesses losing out on sales and losing unproductive outlets and subsidiaries. Apple success was propelled by ability to come out with creative products that were elegantly designed. The iphone and the iPad propelled the sales growth witnessed at Apple. The company used this platform to get back into the corporate market where it sold its devices. Apple Mac was to be brought back to desks. Apple used iPad and iPhone popularity to break back into huge corporations and sell its devices. The global financial crisis had an impact on the sales of Apple in some segments like the corporate devices. However, the other innovative products continued to perform well despite the global financial crisis. In the second quarter of 2009 fiscal year Apple realized sales revenue of $8.16 billion and a net profit in the same quarter of $1.21 billion as well as $1.33 per diluted share. The reported gross margin was 36.4% which was an improvement from the previous year of 32.9%. At the height of the global financial crisis Apple posted tremendous results following the launch of its new products. Nevertheless, the personal computers and Apple II series did not fair well during the economic meltdown that was witnessed in many parts of the world. Developing new products and extending product lines led to increase in the sales of Apple. Apple empowered its employees to be innovative and the decentralized structure and leadership encouraged this arrangement. Creativity was at the center stage of new product development and product line extension (Ireland et al, p.2008, p.38). Products which were not profitable enough were placed on hold and reintroduced later after some improvement had been done. Understanding the times and knowing what the customers want was the secret behind Apple success. The company had a very effective marketing research and strategy and it understood when the right time to launch a product into the market. The art of perfection and paying attention to minor details yielded fruits. Despite the gloom of the global financial crisis, sales of iPhone, iPad, and Mac from Apple continued to show success. Other company had a lot to learn from Apple. When the right products are supplied in the market they will usually create their own demand. The PC’s growth sales rate was the one which were slightly affected by the global economic meltdown. Other products by Apple were performing tremendously well in the market. Apple strategically broke into other market segment that showed positive growth. iPhone and iPad sustained the sales growth of Apple. While PCs posted modest growth, iPad and iPhones continued to flourish. Apple’s sales grow amidst the financial crisis due to its ability to introduce products that the market wanted (Ciro, 2012, p.67). The products elegant, effective, efficient and above all had high quality. This shows that the positive growth of the company would have been better and greater were it not been for the global financial crisis that was experienced in many parts of the world. The profits made by the company would have been greater. Apple used innovation IT products to post positive growth despite the bad economic times witnessed in the entire world. The financial meltdown had very little effect on Apple due to the shrewdness that management used in releasing and marketing of its products. Figure 1: Revenue/retail segment Apple outperformed other players in the industry despite the negative effects of the global financial crisis. The company posited positive growth defying the odds of the prevailing circumstance in the market. Improvement made on products gave the company competitive advantage to remain relevant in times when many companies could not think of research and development into new products. Apple used its popularity in the global market to cash in on fast sales. Strong branding was able to increase brand recognition among the customer and the reliability of the company (Bach, 2007, p.20). Internet advertising enabled the company to market its products allover the world including Australia. Like other developed nations, Australians are technological savvy people and they were ready to be acquainted with new products developed in the IT market. The products developed by Apple had high customer satisfaction level. Information Technology has added value into business through e-commerce and internet advertising. Apple used outsourcing as one of the major strategy of development of its products. Genuine producers were given the responsibility of developing some parts of the Apple products. Innovation and creativity in IT gave Apple an advantage over its competitors in the same market. The company was able to come up with products which were anticipated by customers in the market. Through market research and intelligence Apple understood when the right time to release a new product into the market was (Suter & Herkenrath, 2011, p.281). Keeping in touch with the needs of the customers and developing goods which solve the problems of customers’ creative a competitive advantage for Apple. Innovativeness and new product development is very important for the growth of any company. When the company stops to develop new products, it will realize a drop in sales as customers shift to new products in the market. Taking advantage of disruptive technology was essential for the growth of Apple to a mighty level. IT has been used successfully by Apple Inc to ensure that it remains competitive and deliver quality products to its customers. The customers are ever in anticipation of the next product from the company. Apple was innovative but it stuck to what sold in market at that time. The products that were produced were exactly what the customers wanted. Apple products were meticulously produced. They looked elegant and were of high quality. The company never used price as a market entry strategy. In fact the products of the company remained high as compared to those of rivals. Apple set itself as high quality product providers and was reliable and effective in its marketing strategy. The company had an extraordinary marketing strategy (Martin, 1998, p.134). The company understood what made people excited in regard to its products. The iPad ad went ahead to win an award form Adweek. An excellent marketing strategy that employees IT skills are features provided customers of the company with an opportunity to clearly see the products which were being offered in the market. Through IT the company was able to diversify its products and offer the products to a wide range of customers. The company developed elegant packages that were very attractive. Conclusion IT industry experienced problems following the global financial problem that was witnessed from towards the end of 2007. IT offered some opportunities for companies to extend their competiveness and increase their productivity. IT and innovativeness offered a chance to other companies to lead in productivity and new product development. IT adds value to e-commerce in terms of marketing and connectivity. Apple has demonstrated that correct application of IT can result into growth and increased productivity. Apple set the pace for added value created by IT. Release of new product into the market was timely and improvements to existing products offered an extension to the life cycle of a product. Information Technology was applied by Apple to create competitive advantage that resulted into the company realizing growth in its sales. The iPad and iPhone proved to be very crucial for the company and these products were received in the market with excitement. The company was able to post growth in sales against the odds of the financial conditions in the world. Apple was able to advance its new product with ease and excellence. Reading the times and knowing when to launch products was the secret behind Apple’s success. The company maintained a global presence and commands a formidable brand that is widely appreciated. Work cited Bach, B., 2007, Implications of enabling technologies for Apple Inc.: Cyber marketing & enabling technologies, GRIN Verlag, Berlin. Ireland D.R., Hoskisson R. E, & Hitt M.E., 2008, Understanding Business Strategy: Concepts and Cases, Cengage Learning, New York. Sadeghi, S., 2012, Defensive Strategy – Apple’s overlooked Key to Success, epubli, New Delhi. Gilmore T., 2010, Flyfisher's Guide to the Big Apple: Great Waters Within 150 Miles of New York City: Including New Jersey, New York, Pennsylvania, Wilderness Adventures Press, New York. Martin, S., 1998, New Processing Opportunities for Pome Fruit - Extraction of Apple Polyphenols from Apple Thinnings, Horticultural Research and Development Corporation, New Jersey. Suter, C. & Herkenrath, M., 2011, World Society in the Global Economic Crisis, LIT Verlag Münster, Boston. Ciro T., 2012, The Global Financial Crisis: Triggers, Responses and Aftermath, London: Ashgate Publishing, Ltd. Nanto Dick K., 2010, Global Financial Crisis: Analysis and Policy Implications, DIANE Publishing, New Mexico. . Read More