Apple Industry and Innovation Journey - Case Study Example

A CASE STUDY ON INNOVATIONS AT APPLE INC SUBMITTED BY Reg. No. /Enrolment No. Emblem) Under the Supervision Of Faculty Name DEPARTMENT University Year of course Executive Summary Apple Inc. (Apple) was established in Cupertino, California on April 1, 1976, engaged in producing, selling and supporting a wide range of personal computers, portable media players, mobile phones, computer software, computer hardware and hardware accessories (Apple Store). The company is always known for its strive for delivering new and improved products and find innovative means of marketing and strategies of human resource management. Since its inception, the firm has been enjoying a prominent place among the players in the computer industry with most successful marketing strategies and innovative products and services. The present case study dwells on the innovative features of the business at Apple Inc. The discussion commences from its very beginning and ends with the contemporary strategies and business of the firm. Introduction Apple Inc., (Apple) is a US - based multinational corporation that focuses on design and manufacture of consumer electronics and closely related software products. The company was established in Cupertino, California on April 1, 1976, engaged in designing, developing, selling and supporting a wide range of personal computers, portable media players, mobile phones, computer software, computer hardware and hardware accessories. Till 2007, the firm opened around 200 retail stores across five countries and one online store through which hardware and software products are being sold (Retail Stores). In the year 2008, the firm was awarded the best corporate performer organized by the famous business magazine, Business Week. (Best Performer Award 2008). Innovation Journey Apple started its innovation journey with its first Apple computer in the year 1976. After that the company introduced the Apple II microcomputer on April 16, 1977 and it was different from its major rivals, the TRS-80 and Commodore PET, mainly because of its color graphics and an open architecture. In 1983, the company introduced the Lisa, the first commercial personal computer to employ a Graphical User Interface (GUI). In the early 2000s, Apple expanded its focus on software and included professional and consumer video, music, and photo production solutions with a view to promote its products as a "digital hub". Apple developed its own operating system to run on its hardware such as Macs, Mac OS X and Mac OS X v10.5 Leopard. Apple also independently developed computer software titles for its Mac OS X operating system. Apple also offered a range of professional software titles. On May 19, 2001, Apple launched its first official Apple retail stores (Appendix I) in Virginia and California and continued to set up more stores in the US and other countries. Apple retail stores are a chain of stores owned and operated solely by Apple Inc., dealing in computers and consumer electronics. On October 23, 2001, Apple introduced the iPod digital music player equipped with a 5 GB hard drive and a monochrome screen. The current models can store up to 160 GB and display video, play games, and support a wide range of third-party add-on devices. Apple added new models of iPod(R) touch, after the success of the iPod touch (Appendix II) launched in 2007. Another innovative milestone in the launch of Apple products was the Apple iPhone. It was introduced by the company in late June 2007 at the top price of $599 with 8GB and a less price of $499 with 4GB. iPhone (Appendix III) was one of the most anticipated electronic devices of the decade (Apple Inc History). AppleCare is a customer service program designed by the company to meet the needs of individuals and businesses. In addition, there are numerous online resources within the AppleCare Support website that provide valuable information and instructions. Apple's self-servicing account program is designed for institutions and businesses - for repairing their own products. "Self-servicing accounts must have an installed base of at least 50 Apple computers. They are permitted to repair only the products they own or lease, and cannot repair third party's products. In addition, Self-servicing accounts that maintain Apple certified technicians on staff can perform more intricate covered repairs. Another program called Apple's service provider program was designed for resellers and service providers who were interested in offering service to all Apple customers" (Self Service Account Program). Apple recognized that each employee would bring a wealth of different perspectives to the company and add value in the way they would treat and approach their customers. Benefit packages vary depending on location and employment status of the employees. These include (Exhibit VII) insurance coverage, flexible spending accounts, Employee Stock Purchase Program, a 401(k) Savings and Investment plan. Product discounts and the opportunity to work on great projects with senior persons in the industry are additional bonuses. Apple offers FlexBenefits - an innovative program that allows employees to choose the benefit packages that best fits the employees' lifestyle and his/her family's needs. The company also provides its employees with FlexDollars to purchase basic benefits. The employees also avail benefits for eligible members of their families or buy additional life insurance. The company also provides extra money every month towards child care and health care. Apple tried its best to set an example in the area of human resource management. This is evident through its training and development of employees. Apple had realized that its employees require skills and knowledge to work efficiently. To fulfill this requirement, responsibility for training was divided across the organizational structure. All technical training relating to a person's job was organized and delivered by the individual's department. The human resource department was responsible for all other training. Training is divided into four categories - Offer or Efficiency' program dealing with training to improve the efficiency of staff regardless of their department base; "Business Driven Needs' training relating to the skills and knowledge that Apple believes employees require in order to progress in the business"(Training and Development, p3); Personal Development' training, which includes various soft skills training; and General Awareness' education which is deemed to be a high priority training area and deals with the area of business awareness. Apple created new markets and integrated them with the most successful marketing strategies in the computer industry. Apple leads the computer industry in innovation. The company had brought about the realization of the digital hub concept by incorporating their flagship consumer products like the iMac and had created new markets for products such as the iPod and iTunes. The company experienced some difficulties in its manufacturing and distribution operations, but overcame them. Apple's designs were unique and its hardware was powered by the Intel microprocessors and their operating systems user interface. Apple adopted a new open strategy for selling its iPhone as it expanded to number of countries where the cellphone-media player combination was available. Apple said, "Its iPhone would be offered in Italy later this year (2008) by both Telecom Italia SPA and Vodafone Group. This will mark the first time two operators in the same country will sell the iPhone simultaneously." According to the research firm Canalys, Apple sold more than 4 million iPhones and has 28% of the US smartphone market share and 6.5% share worldwide as of the year ended 2007 (Appendix IV). Future of Apple Inc In February 2008, Apple's iTunes Store became the second largest music retailer in the US behind the leader Wal-Mart. Apple's success was credited to the return of CEO Steve Jobs to the company and the invention of the iPod. These spearheaded Apple's new sales model and encouraged people to buy similarly-branded products because they served better together than their competitors. In 2008, Apple introduced new models of its iPhone and iPod Touch devices with double the memory of previous versions. The new iPhone model had 16 GB of memory and was priced at $499, just $100 more than the 8 GB version. The new iPod Touch (Exhibit IX) was offered with 32 GB of memory and was priced at $499. Apple would continue to sell the older 16 GB and 8 GB versions at $399 and $299 respectively. Monitoring social responsibility, ensuring sustained conformance with the company code, incorporating social responsibility updates are the future developmental plans of Apple. The company is also expanding its monitoring program beyond final assemblers to other suppliers deeper in the supply chain. As of March 2008, the company posted revenue of $7.51 bn and net quarterly profit of $1.05 bn, or $1.16 per diluted share. Gross margin was 32.9%, lower than the previous year's figure of 35.1%. International sales accounted for 44% of the quarter's revenue. Conclusions The innovation instincts demonstrated by Apple Inc can be rightly acknowledged as one of the perfect exhibits of a learning organization. What Apple did was not only it learned but learned how to learn. The transformation of the firm from nowhere to a universally accepted giant is a living example for the success of innovative and learning organisations. Apple's experience really teaches firms that strive to achieve sustained and superior performance through innovation and learning. Firm in the computer industry have to watch and learn from Apple not just as a portfolio of businesses and their people not as just factors of production, but they have to view the company as an educational institution and recognize that competitive advantage flows from people's ability to constantly enhance their knowledge and skills. Appendices I. Apple Retail Store - The Symbol of Innovation II. iPod: Factors of Success III. The Apple iPhone IV. Market share of Apple in Smartphone segment References Apple Store, Store information: Apple Inc [Online] (Cited 26, April 2009), from http://store.apple.com/us Apple Retail Store: Interior Design of Apple Retail Store in the US, Apple Inc [Online] (Cited 26, April 2009), from www.apple.com/retail Apple Inc History, 2008, iPod to PC transfer, http://www.ipodtopctransfer.com/news/apple-inc.html Apple Changes Strategies for iPhone and iPode Touch Devices, Apple Inc [Online] (Cited 26, April 2009), from www.enbite.com/apple-changes-strategies-for-iphone-and-ipode-touch-devices/ Best Performer Award 2008, Apple Inc [Online] (Cited 27, April 2009), from http://search.businessweek.com/Searchi=1&page=2&resultsperpage=20&searchterm=best+corporate+performers+2008&sortby=relevance&u1=searchterm IPod: Factors of Success, Big Apple, Apple Inc [Online] (Cited 28, April 2009), from www.korekalibre.wordpress.com/category/successfulpioneers Retail Stores, Apple Inc [Online] (Cited 29, April 2009), from http://store.apple.com/us Self Service Account Program, Apple Service Programs, Apple Inc [Online] (Cited 30, April 2009), from http://www.apple.com/support/programs/ Training and Development/Lifelong Learning, Case Study: Apple Computers, Apple Inc [Online] (Cited 27, April 2009), from http://www.etst.ie/downloads/apple_computers_cs.pdf Ziegler Chris, The Apple iPhone, Apple Inc [Online] (Cited 27, April 2009), from www.engadget.com/2007/01/09/the-apple-iphone Bibliography Aaker Kumar, Day George and Kumar V (2000), Marketing Research, 7th Edition, John Wiley & Sons, Inc., p. 274. 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