Introduction to Innovation
Innovation is a set of activities that includes new sources, ideas, thoughts, device and methods. It is often viewed as the way or application of introducing better solutions or sources that meet new kind of necessitates unarticulated needs or defined types of market needs. This is mostly used by an organization to attract high number of customers and to attain a strong competitive advantage. Thus, the report is providing information about effectiveness of managing innovations by the organization in developing perfect method of marking a strong presence in the market (Verganti, 2013). Along with this, the report is structuring information starting from organization overview, its innovation techniques of performing and capabilities to bring new ideas, organization position in 2016 and 2020.
THE ORGANIZATION & INDUSTRY OVERVIEW
The organization and its innovation history
Apple is one among the leading brand in technological sector which basically deals in mobile, tablets, laptops, computers and many more aspects. Apple is widely known and popular for its innovation and techniques provided by them to their customers. This popularity has positioned Apple at number one ranking which gives a strong competitive advantage to the company that no other tech company can defeat them. Apple is aiming on inspiring people to think beyond the imaginations and thus, such commitments have helped the company in valuing the customers as well as the market. The company was founded by Steve Jobs in 1976 at a garage and now it owns a strong market share (Hughes, 2007). Apple basically delivers consumers with a high form of succession and presents a great set of software within a fabulous hardware which includes great range of ideas and innovative engineering. However, the company has established a strong presence in its market by creating new and innovative aspects and niches. It has created a new set of game-changing innovations like iPod, iTunes, iPhone and iPad.
Apple has started its business 40 years ago and still has maintained its commitment for providing well crafted and intuitive compute products. Steve Jobs, who formed the company, along with several creative minds was earlier responsible to design and bring advance technical products (Kennedy, 2006). The history of Apple's innovations started with APPLE II which was launched in 1977. It was designed by Steve Wozniak which was highly known for providing a creative set of applications. Main innovation in Apple II is extremely supported and attracted public towards the products. It was a specific system which includes a spreadsheet program that enables the small businessmen to do practical working in one hour than they could do in 10 years with a paper and pencil.
In January 1984, Apple launched its first personal computer which was a basic prototypic desktop that was featuring a mouse and graphical user interface (GUI). The company's software line includes the mass-produced Macintosh PC's which were user-friendly and established as revolutionary in its sector. But, soon the management encountered statements that it is not up to the mark and started addressing some new set of ideas which could be placed in the computers. In 1998, they released iMac G3 which gained many customers due to its bright, blue coloured body and semitransparent casing (Lin, Chen and Chiu, 2010). The designer of iMac, Jony Ive, added a new USB ports that credited high level of help which motivated many potential buyers towards the company. The rising market of company forced them to think beyond the imagination of their customers and introduce new ideas which would assist them in attracting large number of customers. Further, company has launched wide range of innovative and revolutionary products which include iPods (October 2001), iPhone (January 2007), MacBook Air (January 2008), iPad (April 2010) and many more. All the models were extremely different from their competitor’s products which were in the same segment. Company has hold up its commitments on offering creativeness and innovation in its products and services.
Illustration 1: Apple iPhone sales in 2009 to 2015
(Source: Statista, 2016)
Organizations' existing innovation performance and capabilities
The current market of Apple is quite competitive and strategic as the rising number of participants is breaking the level and groups of their potential customers. Being an innovative company, Apple needs to implement new ideas and creativeness in all its products which requires talent, research & analysis and effective approaches to develop and introduce new technical devices. However, it has become imperative for management team of Apple to bring innovation at greater extents (Luther, 2011). The company has implemented many changes in its working by introducing effective and professional level of thinking and identifying ways to complete the task. It has been examined that the company is aiming on bringing innovations in the products rather they developing products as per the demands of the clients. In that case, the company is focusing efforts on their development team and innovation leaders in order to energise the pace of innovations. For this, the firm as defined the following structured of aspects:
Innovative business models – Apple has highly targeted with building and offering innovative and creative products which is very distinctive from the other similar products. The management team of Apple has widened up the scope of humans thinking as they have linked up their imagination to reality. It has been witnessed that the company is aimed on integrating a systematic innovation approaches to build up new creativity and attain high level of success (Madsen and Pedersen, 2013). Apple follows various types of strategies like value proposition, wining by surprising; creating greater values, etc. are evident as the most useful schemes of maintaining their stated loyalty and commitments.
Innovation system – Evaluating the existing position and market reputation of Apple, it has been ascertained that their current creativity performance is likely gaining greater response from the market. The company has implemented a strong system that basically includes effective set of disciplines and talent that builds up professional innovation skills to introduce creativeness in their people, generate new ideas and stimulate design process (Maglio and Spohrer, 2013). However, the process of determining new ideas is easy rather than bringing it to existence.
Apple's design process – As stated in the prior information about the accessibility and actuality of implementing the ideas, Apple has supported their innovative team in generating ideas which is possible to design in practical and technical aspects. Thus, the company has developed an effective set of actions plan to create a team of talented, creative and professional individuals.
Moreover, the present scenario of Apple’s organizational culture has addressed as a key factor in increasing the company’s success and achieving greater response from the potential buyers. As it is termed that a company’s organizational environment and culture develops their capabilities and personalities in supporting up-gradation, implementing new policies and structuring new strategies (McKelvey and Munslow, 2011). In Apple’s case, all the employees are effectively developed and coordinated in their organizational culture that facilitates them in craving new set of innovation and creativity. Such innovations are noticeable in terms of their products like iPhone, iPad, iPod and Apple Watches. While the company’s organizational environment and culture currently contributes to expand the business strengths which eventually imposes limits, derives opportunities and challenges to the firm. However, Apple has been gradually fine-tuning its organizational culture to properly match the dynamics of its business environment. Considering the business strategy of Apple which defines its vision, mission and objectives that are to be accomplish by their management team through offering creative and advance range of gadgets, devices and electronic equipments (Menguc, Auh and Yannopoulos, 2014). For this, the company is introduced various actions plan and aimed on the following aspects:
- Creating an exceptional consumer experience
- Intuitive and innovative user interfaces
- Sleek design of all the products
- Iconic form of branding
llustration 2: Ten most innovative companies in the world
(Source: Jaruzelski and Mainardi, 2011)
By stating such factors of achievements which has helped Apple in accomplishing better performance goals, excellence in working, creativeness and bringing greater level of innovation. All such determinants have fascinated the firm in supporting and succeeding the market objectives. The results of effective performance can be ascertained from the overall sales of Apple's product in the international market. By which the company has determined that in 2015 the sector of electronic gadgets has gained a large extent which supports the management in implementing new ideas and structure of innovative products. In addition to this, the rising awareness and cognizance among the individuals are highly advantageous for the company in expanding its market (Bloch, 2011). However, Apple is mainly focused on offering innovative technical products in the market rather than developing products as per the requirements of their targeted clients. For this, Apple has orientated specific structure and strategies in order to increase the overall capabilities of the company. By analysing the business history and performance in 40 years, it has evidenced that Apple has highly improved its level of working and create new applications, software and hardware which are quite unique and different in the market.
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The industry in 2016
Apple has faced many changes in its techniques of functioning and introducing creativity in their products. For this, they have implemented strategical methods in order to increase the capabilities of identifying greater sets of innovation (Arundel, O’Brien and Torugsa, 2013). The overall staffs of the management has focused their attention on recruiting and selecting better level of talent that has high form of expertise and abilities in creating greater source of creativeness. It has been ascertained that Apple has expanded its market in all the countries of Asia as well as Africa till 2016. Earlier the company was unable to mark high level of presence in this market and thus, the awareness among the potential clients reduces which eventually decreases the overall sales and revenue of the company. But the marketing team of the company stated that high price differentiation among different areas is the reason that brings down the capabilities of the company to attain better level of profits (Battistella, Biotto and De Toni, 2012). In respect to this, the company settled price as per the potentiality of the customers for assorted areas which drastically encourages the revenue and earning capacity of the company.
It has been assessed that Apple's revenues or earnings have extremely soared in 2015, totalling over £155 billion which is rises up from £128 billion in 2014. Till the end of 2016, the company is forecasting this level to reach to £180 billion. It was reasoned that this emerging results was all due to Cook which is an effective operator and has steered the company into a right direction within the new areas such as enterprise and has upgraded all the products that include the iWatch, Apple Music, iPods, iPhones and various other software products, including the real time assistance of Siri. In 2015, Apple launched iPhone 6S which has been accumulated as a relatively small update to the iPhone 6, but still the phone broke the record of Apple's first week sales record (Bloch, 2011). Apple also faced a high response from the customers that has been a big hit in China which supported the company's step to expand its business in Asian countries. The accelerating revenue was addressed over 100% to £8.7 billion in the third quarter of 2015. This motivated all its employees and customers towards the innovative products offered by the company. As in early 2015, Apple was restricted and faced many issues in attracting the buyers of Chinese market. However, Apple has provided following guidance about its fiscal 2016 first quarter:
- Revenue was between $75.5 billion - $77.5 billion
- Gross margin was up to 40 percent
- Operating expenses were totalled as $6.4 billion
- Other income/(expense) were approx $400 million
- Tax rate charges were of 26 percent
While moving onto 2016, Apple is aiming on updating its key products lines and factors that includes new model of MacBook Air which had a quiet low business in 2015. Along with this, company will continue to expand its business in China and in other countries of Asia. The launch of Apple Music, which reported a high level of competence with Spotify and was broadly successful and analysts see expectation for the service to grow to the same size as Spotify around 25 million paying subscribers by the end of 2016 (Bucolo and Matthews, 2011). In addition to this, it was also noted that Apple won't release its next-generation iPhone until the fall of 2016, so there are still some months left of development ahead. For the present time, Apple's flagship for iPhones are the iPhone 6s and the iPhone 6s Plus which are discharged to the public in September of 2015. Though, there is more time left which could be expanded to several months before the launch of new iPhone 7, rumours about the device started generating out in January 2016 (Davenport, 2013). The company has already provided brief information and details about the upcoming iPhone 7 in 2016, but still the market has higher expectation as per the company's commitments for the products.
The Future of the industry in 2020 and beyond
Apple has claimed that they will continue their approach to bring innovations in their software and all their gadgets. As addressed in the analysis that the company has maintained that their level of creativity and bringing intuitive in their products and services. As per the stated strategy of the company in 2016, in which the current CEO of Apple, specified that the future plans of the company is to design a slimmer and thinner iPhone, iPods, iPads and many more. Thus, the reason being planning such strategies is to introduce lightning thinner ports in all its devices that consumes less power and gets faster charge. Such statements by the CEO, specifies their strategies for future, but, in context to the management it is very tough and imperative to overcome the commitments (Hsu, 2011). Introduction to ideas are easy and actuality of that idea it highly pugnacious, hence, high form of thinking and needs more dedication in achieving the specified tasks. For this, the company needs to direct efforts on the development and creative team, as they have to assess the best source of engineering and technical aspects in order to place a distinct product in the market.
It has been determined that the rising expectation among all its existing buyers and followers has exerted high level of pressure on the innovative teams of Apple. Thence, the company needs to identify greater source of aspects which is helpful in determining the level of changes and up-gradation required in the available products. This also fascinates the management in acquiring the needs and requirements of the customers (Luchs and Swan, 2011). Sometimes, the company needs to address the requirements of the followers and existing buyers by determining the level of rumours which is helpful for the management in assessing innovative ideas and implication. However, Apple future strategies is to maintain their hold over the company's commitments, aims, mission and vision which basically describing the innovative scope of thinking and introducing them in practicality. But the following are future aspects of company which is to over commit by the organization:
In upcoming years, Apple is likely to launch its third Plus-branded iPhone (starting from 2014's with 6 Plus and 2015's with 6s Plus) which has the favourable description including a 5.5 inch screen, supportive and assertive real time interface of Siri, 16 megapixel camera. This will probably be launched with the name as iPhone 7 Plus, which is supposed to be quite thinner and will be known as iPhone Pro (Martin and Scott, 2000). It'll arrive alongside the (4.7-inch) iPhone 7 later in the upcoming years and there's even a chance that a new 4 inch iPhone will be launched too which will be the follow-up with name as iPhone SE plus. This would be only be ten months old by then, however, so the customers expect Apple to just focus on introducing bigger iPhones.
By the end of 2020, the company is hoping to launch a new variant of iPhones which would have more lasting batteries and has inbuilt source of pressure exertion. It includes the features that would support the phone in reducing the damages like broken screens, damaged ends, etc. while the phone is coincidently slipped from the hands. The company is trying to introduce a strong and high power screen glass which has higher resolution and has ability to reduce the impacts of damages (Menguc, Auh and Yannopoulos, 2014).
Innovation requirements in 2020 and beyond
Innovation is considered to be an obligatory aspect for each firm to successfully lead in today's highly mobilized world and its crucial tantrums. This gives a mandatory cognition to the concerned firms for approaching with a quite differentiated approach of serving their clients. It is however due to another significant conclusion of the changing perspectives of the market which is directly affecting their trends as well. This in turn alters the prevalent expectations of the customers where they desire for a more reliable formation of their existent products. Such modified market trends largely recommends the firm to significantly change their presently activated application with a more relevant formulation into it (Moon, Miller and Kim, 2013). The designated firm of Apple is already leading its way into this peculiar criterion of innovation where it has efficiently launched certain newer methods of services.
It is due to its constant implementation of variedly innovative measures where they have every-time tried to introduce something fresh for their users. This exceptional practice of Apple has also given it a firm recognition of being the world's number one service provider into its affiliated field of mobile services. Furthermore, it is still on a similar path of success where the CEO has been interviewed to soon launch another fresh conception of mobile application for its clients and users. However, to acquire a desirable outcome of results with a more responsive approach by the customers, Apple like the other firms also needs to primarily inculcate a relevant strategy of managing their innovation (Jaruzelski and Mainardi, 2011). This relates the cited firm to apply certain significant methodologies with a strategic preparation of executing an innovative service with some below ascertained methods-
Workers to deliberate like a pioneer: This refers to the foremost approach by the cited firm where they firstly need to hire some proficient employees into the firm for aptly work onto the requisite concern of innovation. It together recommends the firm to timely enhance the stagnant state of cognition into their employees by conducting some related sessions of training and development. This is basically with a significant implementation of firstly encouraging the employees to accept the fact of innovation where they are equivalently required to face and deal with a challenging situation. Encouraging employees for commencing an innovated service is crucially important for the firm where they will be largely responsible to subsequently work onto the intervened parts.
Responsible and competent invention leaders- It is referred to be the next foremost implementation of the cited firm where they together need to hire some exceptional workers to work at the position of leaders. It is due to yet another significant facet where the leaders will be responsible for planning the commencement of an innovated service into the firm. However, the cited firm together needs to commend a requisite investment level of funds which also relate to the training and development priorities of the leaders (Almquist and et.al., 2013). It is due to another significant aspect where the leaders should be acknowledging a proper usage of the innovated tools and other enforcements as well.
Building future innovation capabilities for the organization
Apple is one of the leading brands in technological sector which has gained high form of market and attracted large numbers of followers. Being liable to their commitments is highly advantageous for the firm which has helped them in maintaining their position in the market. The rising level of customer’s potentiality has provided them a medium of acquiring large section of the international market. Technical sector is termed as the emerging sector which has more opportunities and sources of earning better revenues (Meyer, 2015). Being as an emerging market, the company has to face high level of competition from all their competitors. Thus, Apple has to maintain their perfect direction and set of capabilities and efficiency in innovating ideas. For this, the firm has to structure a professional strategy that involves the best form of recruitment and selection in order to identify and hire perfect sense of talent, skilled and creative individuals. In that respect, the management has to implement and build up sets of interviews and practical testimonials.
Apple is ranking as #1 in the list of innovative companies that has assisted the company in maintaining its direction in a right manner. The company is likely to introduce strategical implications that are highly beneficial for them in holding up the commitments and statements for providing products that are beyond the boundaries of imagination (Verganti, 2013). This focus of the company has managed its distinct position as well as helped their management in extending their portfolio of creative products and gadgets that is mostly made by such unique capabilities. It has determined that this process fascinated company's in changing their direction of actions from expanding more widely in personal computers, the company centring its attention on its base and generally targeted consumers and imaginative professionals with an developed core Mac offering. In addition to this, the company should focus their aim on sold its factories rather than seeking to maintain its world-class performance in manufacturing.
However, the company should monitor a control its actions on developing better set of introducing ideas and creativeness in all their products and gadgets. The company needs to show high level of engineering and innovation in their electric gadgets in order to mark them unique and different from similar products available in the market (Maglio and Spohrer, 2013). In that case, the company should take steps rather than continuing its steps of spending energy and investing funds on raw technology development, it should aim on creating a program for building up greater innovations to others. Such actions would provide them information about the true value added for integration, designing and branding which has made each product effective and innovative that is competent enough to attain a success. However, the company should assess the innovative skills and requirements by analysing the results which is highly profitable for them.
It has been examined that Apple’s profitability and market capitalisation are well above the other competitors present in the industry. This has been defined in the researches as well that the company was voted the most innovative company by a huge margin all despite the fact that it has consistently spent far less on R&D as a percentage of sales than the median company in the computer and electronics industry. Moreover, the company are likely to attract all kinds of individual which are present in the market. Hence, it needs to assess the level and criteria of expectation in order to define the set of innovation. In that respect, the company has to focus and building effective ways of innovating and creating new sources for determining sets of ideas that are practically and technically possible (Menguc, Auh and Yannopoulos, 2014). For this, the management team of the Apple has to implement the best ways, methods and processes of developing new set of thoughts and strategies.
The above report was based upon the innovative tactics of the designated firm of Apple with a prior need of managing their innovation with a strategic approach of its major related dealings. It was thence segregated into certain propositions where it was primarily initiated with an overview of the elected organization. The Apple enterprise was hereby ascertained to be among the world's number one leading firm into innovation where it already has a leading formulation of constantly launching certainly distinctive services for their users. The secondary part was therefore based upon its innovation history where it has been discovered to make some more implementation into the upcoming years for their users.
This was consequently followed by scrutinising the relative performance of the firm in its existing concepts of commending invention. This portion has thence provided a relevant observation where it has been found to acquire an optimistically responsive approach by their clients with a huge demand of such more innovative products and services. Lastly, it has given mandate cognition of prosperity to the firm where it can further implement such amplified procedures with a strong and liable perspective of its future enhancement. The report has therefore catered an overall elucidation to the firm where it has effectively demonstrated some liable strategic formulations of innovation to ultimately get a succeeding outcome of results.
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