Apple's Innovation Strategy: A Case Study

This case study analyzes Apple's implementation of design thinking as an innovative strategy. It evaluates the strengths and weaknesses of the process and its impact on business development. Recommendations for Apple's design thinking are also provided.

Running head: APPLE’S INNOVATION STRATEGY
Apple’s innovation strategy
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1APPLE’S INNOVATION STRATEGY
Table of Contents
Introduction:....................................................................................................................................2
Discussion:.......................................................................................................................................2
Detailed overview of chosen innovation.....................................................................................2
Evaluation of innovative design thinking process by Apple.......................................................3
Analysis of the steps involved in the process..........................................................................3
Strengths and weaknesses of the innovative process...............................................................4
Issues of business development with respect to design thinking and its impact.....................6
Recommendations for Apple’s design thinking..........................................................................6
Conclusion.......................................................................................................................................7
References:......................................................................................................................................8

2APPLE’S INNOVATION STRATEGY
Introduction:
In the present day and age, it is of utmost importance for organizations to devise
innovative strategies that would offer them a competitive edge in the industry. As such, it can be
said that Apple, which had been founded by Steve Jobs, is one of the most innovative companies
in the world today (Pisano, 2015). The company’s signature product, the iPhone, remains one of
the most prominent innovations even today since it completely revolutionized the way people
communicate with each other (Abraham, 2013). A few years ago, Apple incorporated a brand
new innovation into its business strategy, that of design thinking (Kolko, 2015). Apple and its
innovative design thinking was chosen as the subject for this case study because without design
thinking, the company would have failed to reach the heights it has today (Nylén & Holmström,
2015).
Discussion:
Detailed overview of chosen innovation
The innovation chosen for the report is design thinking, which has been implemented by
Apple. This is a solution and goal oriented innovative business process that pays due attention to
customer demands and needs (Johansson‐Sköldberg, Woodilla & Çetinkaya, 2013). It can also
be defined as a human centered approach which integrates consumer needs, the myriad
opportunities that technological advancement offers and the requirements of the business itself
(Seidel & Fixson, 2013). Certain concepts of innovation must be applied here, for instance
the type of innovation. This innovation is an example of process innovation. Process
innovations like design thinking mostly focus on the internal aspects of the business and strive to
enhance the effectiveness and efficiency of the internal organization structure and operations.
Such innovative processes would further facilitate the process of production and the delivery of
the end product to the customers, thus increasing customer satisfaction (Serrat, 2017). Design
thinking may also be defined as one of the most important radical innovations in the field of
technology (Dalsgaard, 2014). Radical innovation refers to a completely new or novel idea that
would alter the infrastructure of the market. This particular innovation can be defined as a
combination of technology push and demand pull. This is largely because design thinking

3APPLE’S INNOVATION STRATEGY
does not simply foster in technological advancements, it also caters to the evolving needs and
demands of the customers.
Design thinking is essentially a technique used by developers which would facilitate
ideation and consequent development of a product or service. It is an iterative design which
consists of five basic steps, namely empathize, define, ideate, prototype and finally test (Calgren
et al., 2016). The main purpose of this process is to gain insight into what customers want or
expect from the brand (Calgren, 2013). The first step in the design thinking process of Apple is
understanding customer needs and designing products accordingly (Liedtka, 2014). For instance,
the application of design thinking has made Apple products all the more interactive in nature.
They emphasize on the minutest of details, which ensures that their designs are not only simple,
but also have an emotional appeal.
Evaluation of innovative design thinking process by Apple
Analysis of the steps involved in the process
There are five steps as part of the design thinking process as used by Apple (Fischer,
2015). They can be explained as the following:
 Empathize – The innovation leaders at Apple attempt to gain an understanding of the
consumer needs by empathizing with their situation. They shed light on a problem that
requires a solution and this can be done through market research (Stephens & Boland,
2015).
 Define – In this stage, the data and information that has been gathered from user and
market research will have to be combined to define the need of the customer. The core
problems of the customer will have to be identified and synthesized with the observations
made in the first step.
 Ideate – In this step, the innovative leaders begin to brainstorm and generate ideas which
would present a solution to the customer needs. During this stage, the innovators are
encouraged to think out of the mainstream and the traditional and come up with ideas and
concepts that are novel and have not been thought of before (Chen & Venkatesh, 2013).
 Prototype – As the name suggests, in this phase an inexpensive and a much more toned
down version of the idea will have to be manufactured and presented to the public. This

4APPLE’S INNOVATION STRATEGY
would give an idea of the features of the product and how exactly it would solve the
problems of the target audience or why they need it (Lammi & Becker, 2013).
 Test – In the final step, the product manufactured would have to be tested and evaluated.
Its effectiveness and efficiency would have to be analyzed and strengths and weaknesses
would have to be highlighted. Room for improvement will also have to be identified so
that product designers can work on them.
Strengths and weaknesses of the innovative process
Strengths
 User desirability is one of the major benefits of this innovative process. Application of
design thinking would enable Apple to come up with minimalistic, sophisticated, simple
yet innovative products which cater to solve some of the everyday problems faced by the
Apple customers.
 Market viability is another benefit of design thinking. Apple, as mentioned earlier, faces
tough competition from other international brands like Samsung or Sony. These brands
too offer similar products using state of the art technology. However, the fact that Apple
designs its products based on customer needs gives them a competitive advantage over
other brands.
 Apple’s innovative team is based on diversity and people belonging to different
backgrounds and cultures are a part of it. This ensures that a plethora of ideas are brought
to the table (Leinonen & Durall-Gazulla, 2014).
 Design thinking is entirely based on a principle of testing and evaluation. Apple has a
dedicated team of individuals who are responsible for testing and assessing the
performance of the Apple products before it reaches the customer. At every step of the
manufacturing process, the products are tested to reveal any weaknesses and highlight
room for improvement.
 The process of design thinking is not simply for the sake of creativity and innovation. It
also adds value and simultaneously solves the problems of the customers (Collins, 2013).
Weaknesses

5APPLE’S INNOVATION STRATEGY
 When the process of design thinking was first introduced to the general public, it lacked a
clear and well defined vision. As is the case with most innovations, it was accompanied
by an inefficient and badly structured process which hindered the process of growth and
also evolution of business.
 The process of design thinking is entirely based on innovation and hence to a certain
extent on ideology. This makes it potentially difficult to convert to reality. It can be quite
challenging to convert the customer centric design process into concrete reality that
would be efficient and appealing to the target audience.
 Another major challenge that Apple faces is the process of perfecting the prototype. It is
expected that the prototype is going to be imperfect with a number of flaws. However, it
can be quite complicated to incorporate new changes and technologies to the prototype to
perfect the final product.
Impact of design thinking as an innovative strategy
One of the most important impacts that design thinking has had on Apple is with respect
to business development. According to Charles, Schmidheiny and Watts (2017), business
development refers to the way businesses and companies like Apple grow and flourish in the
market. The innovative new process of design thinking is one that helps in building companies
and also creating products. This is because design thinking as a concept is not restricted to one
methodology or principle. It has broad horizons and extends over numerous disciplines within
the organization.
Moreover, design thinking as an innovative strategy can be called a competency
enhancing strategy. Design thinking would enable Apple to come up with unique products
which cater to the exact demands of the customer. This would set the brand apart from other
companies in the same industry. Apple has successfully been able to devise products and
services which have enhanced customer satisfaction rates, resulting in retention of loyal
customers. This can be considered as a success factor of the innovative strategy. It can be called
a component innovation because it alters parts of the business operations while simultaneously
preserving the overall operation or structure of the business.
The implementation of design thinking had a tremendous impact on the revenue
outcome and overall operations of the company. Since its implementation, the company

6APPLE’S INNOVATION STRATEGY
registered a growth of more than 20 %. Gruber et al., (2015) claimed that implementation
of design thinking would have an impact on the overall economy and the society it caters to.
In the case of Apple, it has increased team efficiency, return on investment and has also
improved the speed of delivery to market. Apple has also been able to meet the demands of
the modern customers and has enlarged the scale on which it operates. It does not simply deliver
products to the customers, but also alters and enhances the lives of the customers they cater to. It
can be said that the design thinking strategy had a discontinuous impact on the business.
discontinuous effect may be explained as the greater degree of competitiveness that can be
achieved over a shorter period of time. The concept was so revolutionary in nature that it altered
the market and reshaped the competition that Apple faces. Yet, the effect lasted for a period of a
few years and affected a major portion of the market. Market diffusion refers to the speed at
which an innovation strategy is adopted by an organization (Stummer et al., 2015). Design
thinking was adopted by Apple in the late 1990s and was quickly implemented as part of its
strategy. The market diffusion rate of design thinking at Apple was quite high, given the urgency
of the situation. The factors affecting its success were the perceived benefits, the convenience it
offered to the clients and the company, the immediacy of the benefits, the costs involved and the
return on investment.
Recommendations for Apple’s design thinking
 Apple needs to clearly define its mission and vision with respect to innovation. All the
members of the innovative team need to be aware of and aligned to the vision, which
would help them in developing the product in the long run.
 Apple needs to make full use of user experience maps while implementing design
thinking. The whole purpose of design thinking in the first place is to get better insights
into consumer needs. That can be made possible through user experience maps. These
maps would chalk out the journey of the customer experience at every step. This would
help Apple understand how the customer views of feels before, during and after the
purchase of an Apple product.
 Divergent thinking is another aspect of design thinking which ensures that every internal
stakeholder in the organization is involved in the project (Lewis & Lovatt, 2013). Apple
certainly has a team of creative programmers and designers. However, other members of
the organization might have some groundbreaking ideas which need to be explored.

7APPLE’S INNOVATION STRATEGY
During such brainstorming sessions, time limits should be set. For instance, short
intervals of ten minutes should be decided upon. This is because the more time people
get, the more polished and less creative their ideas will be.
 Rapid prototyping is another concept that Apple should try while using design thinking.
It is obvious that when the company first conceives of an innovative new product, there
are bound to be flaws and glitches. The key is to develop prototypes and do so rapidly.
Each prototype should be an improved version of the previous model and should be one
step closer to solving the problem of the customer. For example, 3D printing is one of the
most common ways of implementing rapid prototyping since it is comparatively cheaper
than developing the actual product (Macdonald et al., 2014)
 Apart from design thinking, creative intelligence or CQ is another new concept that
Apple should consider. The concept is still in the initial and is expected to be the future of
design thinking, or even a substitute for it in the future. Creative intelligence refers to the
ability of individuals to step beyond the existing or the conventional and adopt novel
means of solving problems or addressing issues (Ambrose & Sternberg, 2016).
Conclusion
To conclude, it can be said that Apple is undoubtedly one of the most innovative
companies in the world today. It has attained this position on accounts of innovation strategies
and effective management of innovation. One of the most important innovative strategies
implemented by Apple would be that of design thinking, which is a structured and customer
centric process. This is an intuitive process that gains insight into the minds of the customer and
incorporates the same into the business operations. The report is a case study of the innovative
process of Apple and presents a brief overview of the same. A critical analysis and evaluation of
the design thinking process has also been presented with adequate recommendations for its
betterment in the future.

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