Innovative Organization | Apple Inc.

RUNNING HEAD: INNOVATION
MANAGEMENT

INNOVATION 1
Contents
Introduction................................................................................................................................2
Organization and Innovation history..........................................................................................2
Existing innovation performance and capabilities.....................................................................6
VRIO Analysis...........................................................................................................................6
Macro environment analysis and future of industry..................................................................8
Porters Five Forces.....................................................................................................................8
Future of industry.....................................................................................................................10
Conclusion................................................................................................................................10
Bibliography.............................................................................................................................11

INNOVATION 2
Introduction
The report reflects on an innovative organization named ‘APPLE Inc.’. Innovation is highly
significant for attaining growth in an industry. Consistent innovation allows the company to
achieve a significant position in the market. Focusing on the report structure, the initial
section includes the brief company overview. It also comprises of key innovation of the
company. The next part includes the analysis of its key innovation through the application of
VRIO analysis. The following part includes the industry analysis by using Porters Five Force
Model. It also comprises of brief future analysis of the industry. The key purpose of the
report is to emphasize on key innovation as a driving force of growth for APPLE Inc.
Organization and Innovation history
APPLE Inc. is a recognized business organization founded by Steven Jobs in 1976. It is a
recognized international company based in American. It has 504 retail stores across 24
countries including United Kingdom, India, Japan, Australia and Canada (Macrumors ,
2019). In 2019, it has 38 retail stores in U.K. It also operates via online channel in U.K.
Figure 1: Total APPLE Inc. stores in United Kingdom
Source: (Dea, 2019)
It offers high number of electronic products including Television, IPhone, IPAD, Computer,
Watch, and Macintosh.
Fast Company report has published its ranking of top 50 global innovative companies.
APPLE Inc. is considered as ‘world’s most innovative company’. Its innovative business
model, innovation system, design process, innovative partnership and, innovative products
have assisted the company in gaining this title in the global market. It offers products

INNOVATION 3
comprising of best software and quality hardware. It does not invest in many projects.
However, it lays prior attention towards improving user experience and its product quality
(Safian, 2018). It has included key innovative upstream in its supply chain. It mainly includes
Machining, SoCs, and Styling.
Date Innovation Details Importance Driving forces
1984 Macintosh It is a form of
computer. It
involves
‘graphic user
interface’
It allows fewer
issues associated
with virus and
security. It
allows the user
with
multitasking
feature
(Bonheur, 2017).
Human
resource,
Technology,
investment
2001 Digital Portable
Music Device
(IPod )
Portable media
player.
It is
multipurpose
pocket computer
Human
resource,
Technology,
investment
2003 iTunes Music
Store
It involves
digital purchase
of music by
user.
It allows the
user to easily
procure quality
music via this
store. It benefits
the user in
sharing the
music file on
computer and
other portable
devices. Its
automatically
Human
resource,
Technology,
investment

INNOVATION 4
update s app.
2007 Revolutionary
phone (IPhone)
It workers
without a power
button. It is
faster to operate.
It offers multiple
benefits to users.
It allows
tracking
location. It
provides fine
hardware and
software. It also
provides web
browsing, access
to music, video,
camera, email
and many more
features.
Human
resource,
Technology,
investment
2011 iMac It was offered in
five colors
(Chafkin, 2013).
It provides
adequate
features like
IPhoto, and
IMovie
(Arkontaky, 2019)
Human
resource,
Technology,
investment
2011 Siri It is a real voice
interaction with
the digital
device. Initially,
it was included
in the feature of
IPhone.
It allows the
user to function
the device
through voice
interactions.
Human
resource,
Technology,
investment
2014 Apple Pay It is a device
based electronic
wallet payment.
It includes
TouchID.
It speeds up the
transactions. It
provides high
electronic
payment
security with
Human
resource,
Technology,
investment

INNOVATION 5
super easy
process.
2015 Watch It is a wearable
device inbuilt
with multiple
features like
mapping and
calling.
It allows the
user to call, and
message. It
assists in setting
reminders. User
can listen music
by connecting it
to Bluetooth
(Hynson, 2018).
Human
resource,
Technology,
investment
Source: (Khelt, 2016)
Figure 2: iMac by APPLE Inc.
Source: (Chafkin, 2013)
Existing innovation performance and capabilities
APPLE Inc. existing innovation includes Macintosh, Digital Portable Music Device (IPod),
iTunes Music Store, Revolutionary phone (IPhone), iMac, Siri, Apple Pay and watch. These

INNOVATION 6
act as the capabilities of the organization. They assist the organization in gaining high
financial return.
VRIO Analysis
VRIO framework is a tool for resource analysis. It assists the company in determining that
weather the resource or capability is valuable, rare, costly, and organized. Any resource that
A resource is considered ‘valuable’ if it adds value to the firm. It allows the company to
increase its customer value. It is usually done through product differentiation and offering
economy pricing. Presence of valuable resources gave rise to competitive advantage. A
competence and resource is considered rare, if it is acquired by only few companies. Rare
resources offer competitive advantage to the company. In the presence of identical resources,
organization faces competitive parity. Any resource or capability is considered inimitable if
it is costly to imitate by other brands. A resource is considered as organized if the
organization is able to avail the potential benefit the resource. Availability of rare, valuable
and inimitable resource alone is not sufficient, a company should avail the full benefit of
resource. It will assist the company in gaining competitive advantage. Based on APPLE Inc.
capabilities, following is the VRIO analysis.
Macintosh: It is a valuable resource because it helps the company in gaining adequate amount
of revenue. It is rare because only few companies provides high graphic user interface to its
customer similar to APPLE Inc. brand. It is not inimitable because it can be produced by
investing adequate amount of financial resources. It is not inimitable therefore it will not pass
to the stage of ‘organized’ of VRIO Analysis.
Digital Portable Music Device: It is a valuable competency for the organization. It is because
mediate number of customers still opts for iPod offered by APPLE brand. It is not rare
because many companies like SAMSUNG, OPPO, and VIVO offer similar IPOD to
customers. Hence, it is not rare. Therefore, it will not pass to passing stages of ‘Inimitable’
and ‘Organized’ of VRIO model.
ITunes Music Store: It also forms the part of valuable competencies of APPLE Inc. This is
because many customers are still obsessed with its Music store. Customers are availing its
use to buy movies and watch movies as well (Jarnow, 2015). However, it is not rare because

INNOVATION 7
multiple companies have their own music store. Therefore, it is not rare, inimitable and
organized.
Revolutionary phone: IPHONE is one of the most valuable products of APPLE Inc. The
company is mainly known for its iPhone. It offers wide number of iPhone differing in feature,
quality and prices. It is valuable as sale of IPhone is continuously rising in U.K. (Matthew,
2019). It is rare because no company offer alike product like IPhone. IPhones product has
distinct position in the market. It is inimitable because APPLE Inc. is developing continuous
innovation in its product to safeguard its product from imitation. With the passing years it
launches new IPhone series in the market. It is organized as well. This is because
organization is laying adequate efforts to raise the sale of its product. Therefore, IPHONE
assist the APPLE Inc. in gaining high customers and significant market position and high
financial return (Matthew, 2019).
IMac: It is a valuable competency because it provides large number of features in a single
device. Additionally, its convenience and reasonable price made it as a valuable product. It is
because not many companies are engaged in its manufacturing. Therefore, it will not pass to
succeeding stage. Hence, it is only valuable and rare.
Siri: It is a valuable competency because it has eased the customer work. Therefore, it has
increased product value in customers’ perspective. It is not rare as many companies has
availed its usage in their smart devices.
Apple Pay: It is a valuable competency as it provides multiple benefits to the customers. It
helps the customers in making payment through digital channel with simple touch. It is not
rare as many companies including Amazon also offer similar service. Example: Amazon pay.
Therefore, it is neither inimitable nor organized.
Watch: I watch is one of the useful products offered by the company. It is highly valuable in
its usage. It has helped the company in earning high revenue due to sale of high number of
apple watch in global world (Reisinger, 2017). It is rare because only few companies offer
similar watch with like features. It mainly includes Samsung, and Fastrack. It is not imitable
because not high financial resources to produce similar product. Therefore, it is imitable and
non-organized.
Innovation VRIO Analysis Result and

INNOVATION 8
conclusion
Macintosh Valuable, Rare Described above Temporary
competitive
advantage
Digital Portable
Music Device
(IPod)
Valuable Described above Competitive parity
iTunes Music
Store
Valuable Described above Competitive parity
Revolutionary
phone (IPhone)
Valuable, Rare, costly to
imitate and organized
Described above Sustainable/Long-
term competitive
advantage
iMac Valuable, Rare Described above Temporary
competitive
advantage
Siri Valuable, Rare Described above Temporary
competitive
advantage
Apple Pay Valuable Described above Competitive parity
Watch Valuable, Rare Described above Temporary
competitive
advantage
Macro environment analysis and future of industry
Porters Five Forces
Porter’s Five Force model is a framework to analyze the organization position in the industry.
It takes into account five factors (Jurevicius, 2013).
Industry rivalry: It focuses on level of competition prevailing in the industry. APPLE Inc.
does not face much competition in the industry. It only has few competitors. These include
Microsoft, Dell and Samsung. Apple continuous upgrade in technology has allowed the
organization to add innovative features in its product. Therefore, it faces low competition.

INNOVATION 9
Figure 3: APPLE Inc. competitors
Source: (Owler, 2019)
Buyer’s power: It is the customer’s power to drive down the price of the commodity. High
population of UK clearly states that there is large customer strength. Additionally, 73% of
UK population is sensitive to price (Statista , 2018). There are substitute products available to
products. Example: One plus mobile. Therefore, it clearly states that bargaining of buyer is
mediate.
Supplier’s power: It is supplier’s power to increase the price of raw material. APPLE Inc.
has high number of suppliers from different countries. It includes 3M Company, AAC
technologies Holding Inc. and many more (Pratap, 2019). Thus, they have mediate bargaining
power.
Threat of new entrant: It is the risk from the entry of new band in the industry. APPLE Inc.
faces low threat from entry of new customers. It is consistent availing the use of upgraded
technology. It has benefitted the company in gaining high customer loyalty (Goodson, 2011).
Additionally, existing brands like APPLE Inc., Samsung, Dell and One plus has high
reputation possess patent rights.
Threat of substitution: It is the risk emerged from the brands offering substitute products. It
attains mediate threat from its substitute brands. There are mediate competitors (Owler,
2019). It experiences adequate customer loyalty (Goodson, 2011). Additionally, the
switching cost is also mediate. Example: Switching from IPhone to Samsung mobile has
mediate difference. Therefore, APPLE Inc. faces mediate threat of substitution.

INNOVATION 10
Future of industry
APPLE Inc. forms the part of electronics industry. With the passing years, technology is
upgrading. High up-gradation in technology is benefitting the brands to avail the use of
technology in its product. It will help the brands to offer valuable and quality products to the
customers. With the increase in technologically upgraded products, customer will demand
more products. It will lead to increase revenue of the brands. It will ultimately benefit the
electronic industry in gaining higher return in future (Newelectronics, 2019). Growth in
electronic industry will attract more potential to enter in industry and avail benefits.
Conclusion
The report summarizes APPLE Inc. From the above discussion, it is analyzed that APPLE
Inc. is a recognized business enterprise. It is a reputed business with key presence in United
Kingdom. It is acknowledged that Macintosh, Siri, Digital Portable Music Device (IPod),
iTunes Music Store, Revolutionary phone (IPhone), Apple pay and I watch are key
innovation of APPLE Inc. It is evaluated that only few competencies offer competitive
advantage to the brand. From the Porters Analysis, it is evaluated that APPLE Inc. attains fine
position in the industry. It is analyzed that with the passing years, electronic industry will
experience gradual growth.

INNOVATION 11
Bibliography
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sales-statistics [Accessed 21 December 2019].

INNOVATION 12
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