Strategic Management and Innovation Strategy of Apple - Essay Example

Introduction Innovation is considered as the lifeblood of modern organization as the competitive pressures just cannot let any organization to becomecomplacent in nature. The dynamic nature of the competition therefore requires that the organization continue to unleash their creativity to achieve the degree of innovation that can help them to achieve and maintain their competitive advantage over their competitors. What is also critical to note that innovation requires a complete and full time commitment of the top management of the firm as without the involvement and support of the top management, it is difficult to materialize the innovations into the commercial success for the firm. As such there is a greater link between the innovation and firm level strategy that need to be supporting each other at the enterprise wide level. The innovation therefore without a concrete strategy may not be possible for the organizations to achieve in either short term or long term. Apple, one of the leading electronics manufacturing firms in the world started as a Personal computer manufacturer and was completely outclassed by its competitors in almost all segments of the business. However, over the period of time, its innovation strategy has led to it become one of the most innovative firms with a distinguished record for brining in innovative products in the market. This paper will therefore look into the innovation strategy of the Apple and explore as to how Apple was able to achieve the innovation and what are some of the strategies and tools that it used to achieve such position in the market. Apple- a brief History On April fool day in 1976, Apple Computer was invented by a Collage drop out Steven Wozniak and with his friend Steve Jobs to form a company that can manufacture and market the computer designed and developed by Steven Wozniak. By 1980s Apple was one of the leading manufacturers of the computers offering both the hardware and software in one PC. Apple Computers were considered as the State of the art computers providing both the efficiency and cost effectiveness and were phenomenonal in their ability to perform complex operations with more efficiency as compared to most of its competitors. Apple I, Apple II and Apple III were earlier models of the computers that were manufactured and marketed by the Apple by making more innovations into the overall design and technology of these computers. Thus the history of innovation at Apple is one of its earliest achievements as Apple continued to evolve its products by offering better and more efficient technology at lesser cost. Apple-I, Apple’s first Personal computer was just based on a motherboard and the user has to provide all the accessories including the Case as well as power to connect it to TV to achieve the display. This was relatively rudimentary device as per the current status however, it was still an innovative product that offered efficiency with which it can perform various functions. Apple-II was more advanced version of Apple-I and was an integrated computer with longer life as compared to Apple-I which had only one year of lifespan. Apart from this, Apple II was bundled with the casing as well as other peripherals which were lacking from the Apple-I. The real success for Apple started to begin in 1980s when it produced Apple-III which was specifically targeted at business users and provided convenience and ease for the businesses to perform various tasks with more efficiency. As the history of computers suggest that the computers were initially invented to support the scientists however, as the personal computers developed, their use also expanded and it was introduced into areas such as business as well as for personal use. This therefore gave personal computer industry an entirely new outlook which allowed manufacturers such as Apple to continue to innovate and produce more unique models that can specifically provide solutions to the end users including the businesses. It is however, critical to note that the Apple lost its way in the market and was comprehensively overrun by the hardware and software manufacturers including Dell, HP and Microsoft. Since Apple computers are platform specific therefore to operate them one requires the operating system produced by the Apple whereas the personal computers manufactured by other firms were platform free and can run Microsoft Windows- currently the most successful operating system in the world having more than 90% of share in personal computers market. Innovation There are different ways in which innovation has been defined and the definition, over the period of time, has evolved also. Innovation has been defined by West and Farr (1999) in following manner: “The international introduction and application within a role, group or organization of ideas, processes, products or procedures, new to the relevant adoption, designed to significantly benefit the individual, the group, the organization or wider society”. This broader definition outlined above therefore view innovation in a much larger context offering a relatively macro level context of the innovation. Thus innovation when materialized can not only benefit the individuals but the society as a whole thus giving innovation and unique and very dynamic orientation. At the organization level, the innovation not only requires a relentless commitment from the top management of the firm but it also requires the presence of an environment and culture that can foster it. Thus traditional hierarchical organizations often fail to innovate whereas the flat organizations with relatively high level of communication between various departments and functions. This therefore also means that the organizations shall tailor their environment in a manner that can allow it to unleash creativity and innovation and must therefore ensure that every stakeholder including employees are well aware of the overall strategic direction that need to be taken in order to successful innovate and achieve the competitive advantage in the market. Innovation is often perceived at three different levels viz a viz at product level, process level as well as the market level. The three tier innovation therefore requires that the organization must innovate at all three levels to successfully achieve and maintain its competitive edge in the market. What is also however, critical to understand that all levels of innovation must be achieved in line with each other as the identification of profitable marketing opportunities can only be achieved if organization is capable of innovate at the product as well as process level. It has also been argued that the current wave of innovation in the market is more of an open innovation wherein the old and traditional close innovation that requires organization to control every aspect of innovation in order to be successful. However, the new paradigm of innovation is more open in nature wherein the firm is required to take benefit of the both internal as well as external ideas to successfully innovate. The open innovation also requires that the firms must develop their business models in a manner that require them to generate value and value can only be generated if internal and external ideas are combined together into different systems and architectures the requirements of which are defined and outlined by the business model. This new paradigm of innovation also requires that the firms must have access to abundant knowledge in order to unleash the creativity. Thus the research and innovation activity within the organization must not restrict themselves to the internal resources of knowledge but also tap the external sources. Innovation at Apple As discussed above that innovation history at Apple dates back to its origin as it started to manufacture one of the state of the art machines in the industry. The current trends in the industry indicate that the firms are really slashing their Research and development budget and rest on what they have achieved however; Apple still is considered as a firm which is extensively investing into R&D. Culture What is also significant about Apple and its innovation is the fact that it successfully incorporated the culture of innovation especially after the return of Steve Jobs in 1997. The product oriented culture therefore supported the innovation within Apple. This culture was supported by gravitational pull as Steve Jobs define the successful innovation at Apple as innovative ideas were provided the right platform to deliver what was expected of them rather than letting them float around without concrete business support from the top. It is also critical to note that the innovative activity at Apple was duly supported by almost every functional areas however, the major force behind making the innovative products as success was always the sales team of Apple. This also means that the innovative activity within the Apple set up a culture where innovation is considered as a holistic process wherein each piece is fit together in a manner that helped the organization to achieve its strategic objectives as well as to manage its hold over the market. As will be discussed in preceding sections, the culture at Apple was one of the dynamic one which allowed it to integrate innovation at functional level i.e by improving the functional level strategy through leveraging the creative power of its engineers and sales staff who were successful in designing as well as marketing the Apple products. Culture therefore played the critical role in allowing the Apple to achieve the most important landmarks in its corporate strategy. Integrative Innovation As discussed above that the culture of innovation at Apple is a culture that fosters the integrative innovation- innovation that requires the integration of all components of the organization together to achieve the maximum objectives. It was always argued that the secret for Apple’s successful innovation is its ability to produce sleek design equipments however; underlying this innovative strategy is much larger innovative strategy of integrative innovation. Apple not only offer innovation through its unique product design but also makes strategic alliances with other firms to offer end to end innovation. For example, a user of Iphone can not only enjoy the regular features but can also download or rent movies directly through iTunes from most prestigious studios with whom Apple has made alliances to offer direct streaming of videos on the devices of customers. What is also critical to understand that the integrative innovation at Apple and its end to end innovation involve a closer collaboration with the suppliers of various components that are used in the manufacturing of the given product? For example, companies like Dell and HP procure specific components of their PCs from different vendors without actively taking part in the overall design process whereas the hardware engineers at Apple are considered to be involved in the wholesome process wherein Apple is actually involved in the design of the various components that are used in any of its products. This also means that Apple is actually part of the production process despite the fact that it procures various components for its products from different external vendors. The most important aspect of the integrated innovation is the fact that it allowed Apple to remodel itself as an electronics manufacturer rather than just a computer manufacturer. Most of the firms including Microsoft, Dell and HP stuck to just one product and continued to provide advanced versions of the same however, Apple took an entirely unique approach and diversified its innovative energy to different products and services that allowed it to dominate the market. For example, the development of Apple TV, Apple iPod, Apple iPhone etc marked the real deviation from the core activity of the Apple i.e. PC manufacturer. It was this drive for the innovation that allowed Apple Computers to become just Apple so that it can broaden its image and not just to limit itself to computer manufacturing. This dynamic change was mostly the result of the urge for the innovation and utilize the strengths of Apple to achieve relatively more competitive advantage as compared to other competitors who were only limited to the production and marketing of just one product. Taking Chances One of the hallmarks of Apple’s success has been its ability to take up chances against those technologies that are ignored by others. This not only requires that the Apple utilize tried and tested technologies but develop them in a manner that requires maximum efficiency and convenience to the customers. Taking chances therefore requires the integration of risk with the adoption of any new technology however; Apple through its sheer brand image was able to minimize such risks and tried its hand on the technologies that were long considered as the ignored technologies with low potential. For example, with the introduction of Apple IPOD, Apple was able to launch its new ITunes business model wherein it allowed the users to purchase the music directly through ITune store and use it on their devices. When IPhone was launched, Apple also introduced its new App store wherein users can directly download different applications through its App store. Thus innovation was directed in areas that were traditional considered as non-bankable by other firms. This strategy therefore not only exploited the integrative innovation at the firm but also allowed Apple to tap into the core competencies of its strategic partners to allow its users a comprehensive experience to enjoy using the products offered by Apple. Its Apple IPhone was connected with wireless carrier AT&T which is also the partner of Apple for its latest product IPad which is considered as the most important innovation from Apple. This leveraging with other players in the market offer an explosive combination for a unique business model which is based on the exploitation of internal as well as external core competencies and knowledge. Conclusion Apple is one of the leading manufacturers of the consumer goods in the world and is now offering various products and services that are unique and more innovative. Its rang of products include personal computers, MP3 Players, Smart Phones as well as other electronic items that are considered as the state of the art products. Apple was able to achieve this through sheer creativity and power of its innovation that allowed it to bring in more innovative products with consistency. Following open innovation platform, Apple was successful in utilizing the internal as well as external ideas that allowed it to tap into the creative powers to unleash innovation. What is also critical to understand that the Apple’s innovation strategy was product centered while it also followed the integrative innovation wherein it formulated strategic alliances with different players in the market to offer bundled services that can enhance the experience of the customers? The integrative innovation coupled with the culture of innovation at Apple made it more creative in the sense that Apple was able to leverage itself while at the same time getting the opportunity to diversify its products and services. Its nearest competitors including Microsoft, Dell and HP focused on the development of just one product whereas Apple was successful to diversify itself into different segments of the market and offered different products that are more innovative and provide complete unique experience to its customers. Read More