Managing Innovation in Business

This study focuses on managing innovation in business, with a specific emphasis on Apple Inc. Learn about the innovation history of Apple, its existing performance and capabilities, and the importance of managing innovation for sustained success.

Managing Innovation in
Business

Executive Summary
Innovation is defined as application of ideas which are useful as well as novel in which new
services and products are introduced that will add value to organisation. The creative thoughts,
imaginations and ideas which are in the form of methods or device are referred to as innovation.
Managing innovation is the major responsibility which is being carried out by each firm for
sustaining within market for longer time frame (Nardelli and Broumels, 2018). This study
depends on managing innovation with respect to Apple Inc. It is an American firm which is
headquartered in California. This is regarded as one of the four biggest technology companies in
the world. There products comprises of iPhone smartphone, Mac computer, iPod, AirPods and
various other products are being delivered by them. Apple is an evolving firm which brings
unique capabilities in their products through which they are able to be competitive within the
market. There innovations are Apple 1, Macintosh computer, iBook, iPHone and many others.
SWOT and Pestle analysis is carried out to illustrate the performance and capabilities of the
organisation. This will provide an insight into services that are being rendered by Apple along
with challenges they have to go through while doing this. Furthermore, Porter’s five forces
model is used to analyse competition within the market for identification of future or industry in
2019. The next section of report comprises of introduction, past innovations along with present
performances and capabilities. At last it comprises of industry in 2019 and conclusion.

Table of Contents
Introduction......................................................................................................................................1
Purpose of the report & its structure...........................................................................................1
Organization and their innovation History..................................................................................1
The organizations existing innovation Performance and capabilities.........................................2
The industry in 2019...................................................................................................................4
Conclusion.......................................................................................................................................5
References........................................................................................................................................7

Introduction, Purpose & structure
Innovation refers to translation of idea into services or good which creates value for which
customers will pay for (Innovation. 2020). Managing innovation in business implies imperative
activities that have to be carried out by firms for getting best results. To understand this concept,
Apple Inc. is taken into consideration who aims at exploration of new experiences for their
clients within technological world. Their products are Macintosh, iPhone, Apple TV, iLife, Siri
and many more. Rationale behind this report is to carry out audit that will present past
innovations, present performance and capabilities and the industry in 2019. It assists within
effectual learning results as well as goals for reinvesting effectual amount of study for making
task innovative (Winterhalter, Zeschky and Gassmann, 2016). This report comprises of
innovation history of firm, innovation capabilities and performance for formulation of new
company goals.
Organization and their innovation History
Apple Inc is lead firm who renders their services worldwide. They furnish their customers
with computer software, consumer electronics and various other online services. This is
multinational firm which is headquartered in California, USA. It was founded on 1st April, 1976
by Steve Jobs, Ronald Wayne and Steve Wozniak. This is one of the most competitive as well as
leading brand within their own sector. The products which are being delivered by firm makes
them famous within the market, they are: iCloud, IS X, Apple pay, iPad, iPhone and wide range
of services, accessories and support offerings. Within their latest series they have Siri, touch ID
within qualifying devices and Apple Pay (Antikainen and Valkokari, 2016).
Some of the innovations which are brought in by Apple Inc are: in 1976 the original
computer named Apple 1 was brought in the market. The first Macintosh computer was
developed in 1984 which is released as affordable computer which provides users with graphical
user interface. The power book (first laptop) 100 was designed as well as manufactured at cost of
$2500 in 1991. IMac was brought in 1998 and 1999 iBook was to be launched which would
include standard wireless networking (40 years of Apple – in pictures, 2020). eMac was brought
in the year, 2002 then Mac mini 2005, MacBook in 2006. In 2007 iPHone was developed which
took around 2.5 years which provided portables computing. In 2008 MacBook Air and iPhone
3G were launched, iPhone 4 2010, 4s in 2011, iPhone 5 in 12, iPhone 6 was brought in 2014.
Apple watch became popular in 2015. iPhone 7 in 2016, SE version in 2016 and X was launched
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in 17.HomePod was released on 2018 and in 2020 they will strt producing electric cars which
will have autonomous driving.
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Illustration 1 Every product Apple has made so far
(Source: Every Product Apple has made so far, 2020)
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Existent innovative products offered by Apple Inc comprises of iPhone X, iPods, XR,
smart watches and many others. They are available in different a colour which makes them
unique and captivate customers (3 signs that Apple has lost its innovation Mojo, 2019). Apple
Inc always tried as well as believed within rendering innovative services as it enables them to be
successful and sustain in the market for longer duration of time. Another feature that is being
delivered by them is AR experience, which is an innovative app in which new tools have been
added for integrating as well as sharing experience in peculiar location or with an object. The
rationale behind this is to furnish their probable customers with best innovative technologies
through which they can have strong brand positioning within market and manage their growth.
This aids them to align with demands of their customer and address technological
evolution. It is other capability of Apple that aids them to be stabilised within market for longer
duration. For this, firm makes huge investment for carrying out research and development along
with products they are about to design. This is done to analyse feasibility of what they are about
to do and analyse results they can have from this as well as whether through peculiar innovation
they (Apple Inc.) can accomplish requirements of customers or not. This enables them to render
new experience to customer and raise their market shares along with profits with technological
industry (Ritzén, 2019).
The organizations existing innovation Performance and capabilities
At recent time, Apple has launched iOS 12 that is one of the latest versions of enhanced
mobile operating, the major benefit that is being laid by this is that it offers amplified speed
which leads to attainment of tasks in frequent way (Archibald and Archibald, 2016). The new
model alters mind of their users as they can have new services through which probable demands
of their customers can be fulfilled. Devices furnished by Apple Inc are creative and as per
requirements of market or even beyond that which makes them leading market players.
Existing Innovation
Apple Inc has opted for making use of systematic approach towards innovation which
leads them within exploring new ways by which they can manage growth of their business.
Existing innovations which are being brought by firm are Multitouch technology which is new
creative or innovation gadget that was launched within research and development labs of Apple
Inc. It was possible to have their own multitouch due to the acquisition of Delaware based firm
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named Finfer Works in 2005. Customers agree on the fact that Apple is one of most innovative
firm which always brings something within the market in their products (Nardelli and Broumels,
2018). Through it they can have new experiences as well as it becomes easy to deliver tasks
carried out by them. According to statistical global search data in context of iPhones it has been
found that sales have fallen down since 2012. This leads to bring in a question that is it true that
Apple Inc is lagging behind in innovation brought in by them with respect to tech giants like
Google, Microsoft, Amazon and Tesla. This enables firm to rebuild their innovations so that they
can have a continuous growth as well as ensure that it is systematically managed.
SWOT Analysis: It is being utilized by Apple Inc to analyse their internal capabilities so
that they can be used in an affirmative way to attain required results. They are mentioned below:
Strengths Weaknesses
 It is a valuable brand which delivers
their services in global environment.
 Apple Inc. is a brand of Choice by
carrying out adequate research.
 They possess unique ability for
designing as well as development of
proprietary services, applications,
software and hardware.
 Products offered by Apple Inc. are
costly and this is not affordable to low-
income customers (Apple SWOT 2020|
SWOT Analysis of Apple, 2020).
 Incompatible with other software’s like
Apple products do not support other
technologies.
Opportunities Threats
 Apple Inc. can expand their distribution
network which will provide them with
options for growth.
 Smart wearable technologies are
dominating, this will provide Apple
Inc. with options to grow beyond
AirPods and Apple watch.
 Apple is dependent on China for supply
chain due to Coronvirus outbreak the
annual revenue of firm will disrupt up
to around 32%.
 They have become world’s third
vulnerable brand image as illegal
dealers sell counterfeit products at same
value as that of original Apple
products.
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Apple Inc is providing their customers with innovative products due to this they strong
brand image in the market. This implies that there performance in the market is relevant which
can be understood by taking into consideration their revenue is around $265 billion and net
working capital of Apple Inc is near about $27.687 billion till 2019. Capabilities possessed by
Apple are strong technical base within devices developed by them as well as innovations in
those. They make use of Blue Ocean Strategies in which emphasis is laid on differentiation and
demands for products are created. Here, new market is developed which makes competition
irrelevant.
Pestle Analysis: It implies external environment which creates an influence on operations
of Apple Inc. These factors are illustrated beneath:
Political factors: This denotes the impact of government as well as associated firms on
business. Basically, they provide Apple with opportunity as well as identify probable threats. The
political stability within developed countries assists them to grow. But trade disputes between
China and US acts as a threat for growth and sales of products.
Economic factors: The high economic growth rates within Asian countries acts as
opportunity for Apple Inc as it will lead to enhance their sales within foreign markets (Apple Inc.
PESTEL/PESTLE Analysis & Recommendations. 2020). Furthermore, high disposable incomes
lead to creation of more probabilities to sell high priced technologies.
Social factors: The enhanced usage of smart phones furnishes Apple Inc with impelling
opportunities for growth. Ethical concerns related with manufacturing of Apple’s products in
China offend probable customers in regions like Europe and North America which may lead to
decline within overall sales of firm. For this, they need to improvise their practices, policies and
approaches for technological innovations.
Technological factors: Apple Inc. is offering cloud services but to a restricted extent but to
have maximised profitability they need to expand their cloud infrastructure. In context of
external strategic factor enhanced technological integration will provide opportunity to amplify
growth of Apple Inc. It is essential for firm to reinforce their business capabilities for exploiting
opportunities as well as protect themselves from rivalry threats.
Legal factors: Enhanced privacy regulations acts as both opportunity and threat. This factor can
lead to costly regulatory compliance needs and will also limit technological firms (Prokop and
Stejskal, 2017). For an instance, in US, EU and Australia Apple Inc faced strong criticism in
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context of their policies on third party repair. Firm needs to emphasise on regulatory compliance
along with privacy protection.
Environmental factors: Apple possesses opportunity to improvise their operational cost
efficiency by providing them with attractive products. In this context, Apple Inc. addresses these
factors in their macro-environment (Van Lancker, Wauters and Van Huylenbroeck, 2016). For
this, they have opted for strategic measures for adjusting their operations in context of ecological
trends.
The above analysis illustrates that various opportunities are provided; Apple Inc needs to
exploit them for expanding their reach within global information technology service market.
Apple has made more than 100 acquisitions and mergers in last 40 years. The top
activities that are being carried out by them are illustrated here:
In 1997, Apple purchased NeXT for near about $429 million. This firm was co-founded
by Steve Jobs. This merger has integrated software of NeXT with hardware of Apple to form
iOS and OS X. Emagic was early acquisition of firm i.e. in 2002 for $ 30 million this acquisition
was carried by them for developing digital audio workstation software named GarageBand which
provided vast levels of customisation. Siri implies intelligent personal assistance which will aid
within making reservations, getting directions and carrying out wide actions. In 2010 it was sold
to Apple and from then it is major feature in Apple products. Apple has purchased Anobit
technologies for $390 million in 2012 (Top 7 Companies Owned by Apple, 2019). The firm was
specialised within manufacturing flash memory drives for iPhone. PrimeSense, 3D motion
sensor firm was acquired by Apple on November 2013. They are known for motion tracking
software. This was utilised by Apple in their iPad app named itSeez3D to capture 3D models as
well as 3D printing.
The largest acquisition made by Apple was Beats Electronics in 2014for around $ 3
billion cash and stock. It allowed firm to sell Beats line of headphones within their retail stores.
In 2017, Apple announced to have Shazam which was a music identifying application for $ 400
million and on September 2018 it was finalised. On October 2018, Apple has bought stakes in
Dialog Semiconductor for $600 million who made various components of iPhone In March
2019, they have acquisition of two British organisations.
For consecutive two years Apple has won Brand of the Year award for their Macbook
computers, iPhone and iPad in 2013. Apple Inc. is well recognised within technological industry
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which possesses ability for bringing in new within the market which means that invent
innovative services for their probable customers. Networking is done to make people aware
about products delivered by them so that they can acquire maximum shares within the
marketplace and for this appropriate experimentation are done by carrying out market analysis.
Apart from this, firm possess a strong customer base who go for their products and also gives
them feedback with respect to what they are looking forward for (Prokop and Stejskal, 2017).
They provides effective designs and features within their products for gaining attention of their
customers. As per evolution of technology, they opts for trends prevailing within market and also
brings in their innovation with respect to technological aspects. This leads them to have
competitive edge in context of their competitors.
The industry in 2019
Apple Inc. is information technology firm that renders their services with high range of
products that comprises of televisions, wearable devices, televisions and computers. This creates
long lasting impact on productive goals of firm for sustaining within market. Apple Inc. renders
their services in highly competitive market as they furnish both software and hardware products.
Their vision is to convert technology in such a way that requirements of their customers can be
accomplished by providing their customers with best experience (Biemans, 2018). AirPower is
new innovation of Apple Inc through which two devices at a time can be charged. The simple
reason behind this is to render simultaneous options for charging to their customers so that they
can have ease. It was a wireless charging mat.
There are wide range of products which are being furnished by Apple Inc, and are also on
demand across world. This lead them to have highly recognized devices which enhanced
competitive environment. Some firms tend to bring in same features at low prices for capturing
market shares (Winterhalter, Zeschky and Gassmann, 2016). This made it essential for them to
be innovative for managing their growth within market. Features like single slab of glass,
wireless charging will lead them to captivate more customers. Within 2019, iPhone may have
features like 128GB storage space so that individuals do not have to look for external space.
According to Digitimes, Apple's 2020 iPhone will comprise of 6.67 in, 6.06in, 5.42in models,
iPhone XS Max sport, XS and XR 6.5in, 6.1in and 5.8in screens correspondingly. OLED screen
technology will also be provided and 5 nanometre chip will be developed by TSMC which
implies that AR as well as AI applications will be provided that will enhance battery life of their
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smart phones (Apple's 2020 iPhone lineup tipped to include 4.7in iPhone 8 lookalike, 2019).
This will enable them to produce flexible handset.
Hologram implies a 3D virtual object which appears as standing next to table, floating in
air or in table. Apple Inc. have got hold on some start-up who deals within holographic segment
and can develop light lenses. It will allow them to have augmented reality working in which acts
as a potential for latest frontier (Antikainen and Valkokari, 2016). This implies AR camera may
be used within iPhone provided by Apple Inc. To build up future capabilities, firm needs to
formulate strategic plans through which they will be ble to identify actions that have to be
conducted by them towards their goals. Apart from this, it will aid them to monitor activities for
assuring that feasibility can be attained. For being innovative, it is important to have a roadmap
through which it can be decided what step has to be implemented to remain competitive.
Porter’s Five Forces
Competitive Rivalry: Apple faces strong or aggressive competition from their
competitors such as LLG and Samsung. Like aggressive advertising, imitation and observable
rapid innovation impose a strong force on environment of industry. In context of differentiation
all the products offer peculiar purpose like popular apps are available for iOS and android
devices (Apple Inc. Five Forces Analysis (Porter’s Model), 2020). The switching cost from
Apple to other devices is low in terms of price, accessibility, functions and other concerns. These
factors lead to high competitive rivalry.
Bargaining power of buyers: Customers can easily change to brands which make them
powerful within compelling firms such as Apple for ensuring satisfaction of customer. Each
buyer’s purchase is minimum in comparison to total revenue of firm. The availability of
comprehensive comparative information related with competing products features allows buyers
to shift from one to other provider. It denotes that there is high impact on overall operations of
Apple.
Bargaining Power of Suppliers: There is a weak influence of this factor as Apple Inc.
renders their services at global size which provides them access to various suppliers around the
world. Ratio of concentration of firm to supplier concentration restricts power of suppliers. This
implies that there is minor issue of this factor on developing Apple Inc strategies.
Threat of Substitutes: It is weak as computing technology, online services and consumer
electronics offered by Apple Inc cannot be replaced by other rivals. The substitutes provide low
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performance due to restricted features. This implies that while formulating decisions of
management the firm do not have to take into consideration this factor.
Threats of New Entrants: To compete against Apple Inc, there is a need of high
investment and to develop strong brand is also costly. For an instance, Google has brought
products such as Nexus smartphones which shows that large firms have potential to compete
with Apple. Thus, the overall impact of this factor will be moderate.
Conclusion
From above it can be concluded that, managing innovation within business plays critical role
within firm. It is not necessary that if one creative service is being furnished by firm then it will
take them to long run but it has to be maintained to ensure their stability within market. Apple
Inc brings in innovations and creativity within their services which makes them unique as they
are technologically strong. This leads them to manage their performance as per required
standards thereby attains enhanced profitability by meeting or exceeding demands of their
customers.
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References
Books & Journals
Antikainen, M. and Valkokari, K., 2016. A framework for sustainable circular business model
innovation. Technology Innovation Management Review. 6(7).
Archibald, R. D. and Archibald, S., 2016. Leading and Managing Innovation: What Every
Executive Team Must Know about Project, Program, and Portfolio Management.
Auerbach Publications.
Biemans, W., 2018. Managing innovation within networks. Routledge.
Nardelli, G. and Broumels, M., 2018. Managing innovation processes through value co-creation:
A process case from business-to-business service practise. International Journal of
Innovation Management. 22(03). p.1850030.
Prokop, V. and Stejskal, J., 2017. Different approaches to managing innovation activities: An
analysis of strong, moderate, and modest innovators. Engineering Economics. 28(1).
pp.47-55.
Ritzén, S., 2019. Managing Innovation for Circular Industrial Systems. In Sustainable Business
Models (pp. 181-209). Palgrave Macmillan, Cham.
Van Lancker, J., Wauters, E. and Van Huylenbroeck, G., 2016. Managing innovation in the
bioeconomy: An open innovation perspective. Biomass and Bioenergy. 90. pp.60-69.
Vrontis, D. and Rossi, M. eds., 2016. Managing Globalization: New Business Models, Strategies
and Innovation. Cambridge Scholars Publishing.
Winterhalter, S., Zeschky, M. B. and Gassmann, O., 2016. Managing dual business models in
emerging markets: An ambidexterity perspective. R&D Management. 46(3). pp.464-479.
Wymbs, C., 2016. Managing the innovation process: Infusing data analytics into the
undergraduate business curriculum (lessons learned and next steps). Journal of
Information Systems Education. 27(1) p.61.
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