BM627 - Managing Innovation in Business: Apple Inc. Report Analysis

This report provides a comprehensive analysis of Apple Inc.'s innovation strategies, focusing on its history, current performance, and future prospects. The report begins with an executive summary and an introduction to the concept of innovation in business, using Apple Inc. as a case study. It delves into Apple's history, highlighting key innovations such as the iPod, iPhone, and Siri, and discusses the company's existing innovation performance and capabilities. A PESTLE framework is applied to assess the macro-environmental factors influencing Apple's growth and innovation. Furthermore, a SWOT analysis is conducted to evaluate Apple's strengths, weaknesses, opportunities, and threats. The report also examines the electronic industry, including a discussion of Porter's Five Forces model, to understand the competitive landscape. Finally, it concludes with insights into Apple's innovation strategy and future plans, including the upcoming AR/VR features in the iPhone, and suggests strategies for market share and profitability growth.

Managing Innovation
in Business

EXECUTIVE SUMMARY
The report is basically discuss innovation as well as its importance towards the growth of
a businesses. The act of converting an innovative idea into a service or product which develops
value for the customer is known as Innovation. In business terms, innovation takes place when
new idea is acquired by an entity in order to highly satisfied customer's expectation as well as
needs. In this competitive world, it is important for every business entity to upgrade their goods
and services so that they can gain success at marketplace. Apple Inc., is chosen as a base
company for the current report. The company focuses on designing and development of
consumer electronics and offers technical products in the market. The main motive of Apple is
to offer innovative and advanced products to their customer and to give them the better
experience. The background as well as history of the company is discussed in detail in this
report. With this it covered innovation done by Apple in past. PESTLE framework is discussed
in this report with relation to Apple in order to find factors which affect performance &
efficiency of company. The existing performance & capabilities of Apple is included in this
report. SWOT analysis is conducted by company in order to know their weaknesses and strength
as well.
At last, the report covered aspects about electronic industry for gain an insight about
industry growth. Porters five forces model is discussed to identify the present condition of
mobile industry. In addition to this, it has been stated that Apple adopted innovation strategy
with an aim to to maintain sustainability within the market. Moreover, it has also been analysed
that Apple is soon launching new feature in iPhone that is AR & VR feature. It has been
suggested that Apple require to introduce reasonable price services as well as product for middle
segment people which leads to raise in its market share & profitability.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
About company & its innovation history...............................................................................4
The company existing innovation performance & capabilities..............................................7
The industry 2016-2019.........................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Innovation is defined as launching of an idea at marketplace with an aim to meet
expectations and needs of customers or it is basically converting innovative thoughts into a
product as well as service (Biemans, 2018). Modifications, change in internal features and design
considered as an innovation that gives an outstanding experience to customers. In the current
report, Apple Inc. is chosen as a base company. It is a multinational organisation and deals in
selling, designing, development of consumer electronics. The company was founded in year
1976 by Ronald Wayne, Steve Jobs & Steve Wozniak. The present report covers innovation
history of the selected organisation that is Apple Inc. With this, it discuss about organisation
capabilities & its existing innovation performance. Later, it covers about industry in year 2016
and the whole information about Apple.
MAIN BODY
About company & its innovation history
Apple is a multinational association and is one of the leading technology company
worldwide. The company head office is located at Cupertino, California and has presence in
more than 25 countries worldwide. Apple provides products such as iPad, iPhone, Apple watch,
Air Pods, Apple TV, Home Pod speakers and many more. Its services consist of Apple Music,
iMessage, Apple Care, iCloud, Apple pay, iTunes Store etc.
The company believes in providing innovative and advanced technology to customers
and it has done innovation earlier and still continuing with the same legacy (Bieraugel, 2015).
The big Innovations of company are iPOD, iMac, iPhone, Siri, App store and so on. The
company develops changes in its product iPhone which contributes major part in its success
within the market. Below are some of the Innovations took place by company in iPhone is
mentioned below:
2008 ( iOS App Store): In this year, Apple was decided to incorporate with iTunes
which allows users to purchase its application and download it easily in their iPhone.
2011 (Siri): The company add new feature in iPhone that is inbuilt voice integration
which take the commands from the human and performs the same. The company named this
feature as Siri.

2013 (64 bit Processor): It is one of the biggest innovation in iPhone that consist of A7
Processor which have the capability to store large data in it.
2013( Touch ID): This feature consist of fingerprint scanner in iPhone which is a new
touch feature in it. This allow users to open their phone with a single touch on their phone
(Cohendet, Parmentier and Simon, 2017).
2015: (3D Touch): Herein, the company launches 3D touch in iPhone which take
commands from the users on just a pressing force. In addition to this, 3D feature allows
customers to pressed smoothly on the displayed screen.
(Source:10 years of iPhones: A timeline showing phone’s evolution)
By analysing the above given history of company, it has been stated that macro
environmental factors impacts on the overall growth and innovation of Apple. These factors is
mentioned below in context to Apple:
Political factor: This factor mainly involves the level of government intervention in a
company. In relation to Apple, the R&D process of company is located in America. The political
stability of America is strong and there is less modifications in laws which allows company to

implement their innovative idea (Duarte, Goodson and Dougherty, 2014). The company has the
support of government which assist Apple to effectively perform its functions. If the political
situations are favouring innovation and success of business, then it is helpful to launch new
products within the country.
Economic Factor: The development in the growth rate of countries increases the income
level of people which directly leads to raise in the purchasing power of customer's. With
reference to Apple, this allow higher authorities of Apple to bring new innovations at market
place and raise their market share (Apple Inc. PESTLE Analysis, 2020). In addition to this,
increase in the income level of people develops a higher chance for the company as it products
its easily accepted by the customer's. When the economic condition of country including
employment rate, inflation rate, etc. If country has good economy, it will accelerate innovations
within business. Customers are enable for buying new innovative products.
Social Factor: Nowadays, people of the society prefer to use and updated devices in
order to maintain the standard level (Lawrence, Dover and Gallagher, 2014). It affect positively
on Apple sales as societies accepting new technologies which is designed by company. Its new
added feature such as Siri attracts large audiences which automatically increases its demand at
marketplace. The social factors which affects innovation in Apple includes the knowledge of
customers for using AI technology. Phones launched by Apple are made for customers and they
always launch some new AI features that attract customers for using the latest technology.
Technological Factor: Change in the technology raise customer expectations as well as
their demand. With reference to Apple, the company focuses on offering latest technologies at
marketplace which raises its sales and its market share. Apple offers cloud services and friendly
apps on its devices. This feature attracts customer positively which leads to the growth and
development of Apple within the market. Every customer is attracted towards latest technology
in mobile phones. Apple uses latest AI features in it's phones and this helps in capturing tech
savvy customers.
Environmental Factors: People are more concerned towards using eco-friendly devices
as well as gadgets to safeguard environment. In order to contribute towards the environment the
company makes innovation in processors, batteries and those components which dis not harm
environment and develops less heat. This build positive image in the mind of customers which

leads to raise in its sales and market reputation. Apple tries to use environment friendly processes
and products. This helps in increasing the number of customer base.
Legal Factors: It involves different legislations which an organisation need to follow in
order to smoothly carry out its activities (Lind, 2017). In today's world people are more
concerned towards privacy or data leak which raises the demand of those products that provides
security to customer's. In context to Apple, the company is launching device which consist high
security system. This increases the demand of its latest iPhone which offers privacy features and
high security system to customers.
(Sources: Scanning the Environment: PESTEL Analysis, 2016)
The company existing innovation performance & capabilities
It is said that Apple Inc. has performed ample number of innovation in past few years &
is currently working in order to enhance their performance in the field of innovation. It has been
analysed that Apple is expanding ample number of funds on the R&D department which help
them in producing high quality and unique products as compared to their competitor products.
This will assist them in order to introduce innovative products on a continuos basis which
includes IPhone X, IPhone 8 & Iphone 8 plus. These are the current innovations which help the
company in order to attract large number of customers towards their organisation. Products of
Apple have 64 bit processors and it help in smoothing the functions of IPhone so that individual
will be able to perform their work in less time period (Malhotra and Majchrzak, 2014). R&D
department of the company is performing hard in order to enhance their innovative strategies and
capabilities.
Abilities of Apple: The Apple capabilities at present is so high and meet the expectations
of customers effectively. Now the R & D team of Apple emphasise on making future techniques
that works beyond their expectations or offers those devices which customer never thought off.
They plan to offer completely innovative product at marketplace which gain the eyes of people
and raises its sales. The company is planning to add new feature that is Virtual reality which
provide live experience when user open cameras of iPhone.
In addition to this, Apple is also planning to offer new feature that is large screen in
iPhone plus model considering perfection. The company is also trying and focusing to design
smart connector by the help of its Research & Development team. Herein, the user can easily
share data on other devices or on computer effectively.

SWOT Analysis: This framework assist companies to measure out its weaknesses as
well as capabilities. With this, it helps an organisation to make improvement in its activities &
operation and gain high growth within the market. With reference to Apple, the higher
authorities of company adopts this framework at workplace so that they can know their
capabilities and weaknesses which will further leads to improvement in its innovative product
(Pekuri and et. al., 2014). The SWOT analysis of Apple is mentioned below:
Strengths: Apple is the only company in the world who offers innovative products
rapidly in the market and still focuses on providing better technology devices to the customers.
Apple is one of the biggest company which provides personalized computers as well as
technology devices and that is the major reason it have billion of users. The major strength of the
company is that they have loyal customers who did not shift to any other brands. The brand
reputation of company is high which raise its value and sales in the market. In addition to this,
the company believes in simplicity and aim to provide those gadgets which gives outstanding
experience to its users. Apple is a well known organisation which is known for it's innovation
since years. This company produces phones that possess latest AI technologies.
Weaknesses: Charging premium price is one of the biggest weakness of Apple as it
change the preference of customers which leads to decline in its sales and rise in the sale of its
competitors. The expectations of their customers increases day to day which is not easy for the
company to maintain (Sund and et. al., 2016). Most of the products which company offers is
incompatible with other party accessories and raise the cost of Apple which affect on the price
that is charged from the customers.
Opportunity: The company have the opportunity to enter in other segments such as
Apple cars. With this, Apple can offer new feature in iPhone that is multiple camera which
influence more customers that directly affect in is sales positively. Moreover, the company has
the opportunity to provide reasonable rate products and services in market so that their users can
increases which automatically increases its market share as well as profitability. Customers
within market are looking for new innovations in smartphones for making their work easier and
secure. Apple makes new innovative products and thus it has the opportunity for capturing
customers by providing them new innovations.
Threat: The major competitor of Apple is Android which grabs high market share and
lowers down its sales. Google Android is the second most valuable brand that affects Apple

adversely and force company to enter in smartphone competition. Competitors such as HTC,
Samsung offers wide variety at affordable price in the market and due to which Android share is
more instead of Apple in the market (Tell, Berggren and Van de Ven, 2017). Its product Mac
Book faces stiff competition from its competitors Dell, Lenovo, Sony as all these brands offers
design as well as beautiful models in the market. Google Android is planning to launch new
features which is similar to iPhone features and might declines its market share and sales.
The industry 2016-2019
Every organisation manufactured or developed consumer electronics with an aim to make
people life easier as well as convenient. These devices offers effective communication and
entertainment to customers. These changes assist customers to live their life easily and
conveniently functions out their day to day activities. Mobile industry adopts new innovation and
provide new features in market that impacts positively on the customers purchasing decision. It
has been analysed that innovation in Smartphones enhanced the thinking ability of customers
which results positively on the growth of mobile industry (Tidd and Bessant, 2014). Due to
innovation, the markets develops rapidly as compare to past years or past innovations.
At present, almost all the mobile companies focuses on producing as well as bringing
those electronics in market which attracts large audiences. For example, the management team of
Apple is planning to add new feature in iPhone that is virtual reality and augmented reality which
gives live experience of the pictures they take from their mobile. One of the most important thing
before introducing or launching product in market is to identify customer needs as well as
requirement. This will provide an understanding to companies about which feature they add or
adopt by the customers rapidly (Wang and Tsai, 2014). In addition to this, the company get to
know which option is suitable and preferable to offer at marketplace. In order to analyse the
present situation of mobile industry, the higher authorities of Apple uses Porter's five force
model. The factors of this model is mentioned below:
Threat of new entrants: The entry of new competitors is difficult as to enter in mobile
industry it takes high amount to invest associated with high risk. The threat is less for Apple of
new entrants. An existing can be the competitor or affects on its innovative technology but it is
hard for the new company to compete or enter in this market.
Competitors Rivalry: Herein, the competition is high for Apple. In terms of consumer
electronics there are high number of companies who produces and designed cell phones at large

scale and offers similar features in the market. In addition to this, they provide the same
innovative technology to the customers. Apple’s practices, procedures and policies reflect the
differentiation strategy to target the wide range of customers as the overall competitive strategy
of the company. The company serves a wide range of differentiated product to the customers
ranging from the classy power user to the new first time users. The differentiation is based on
unique design, reliable quality and customer services driven by high customer values.
Threat of Substitute: In this industry, there are large number of competitors who
provides same products to customers. The threat of substitute is high for Apple which declines
the profitability level of company and affects its market share. Some substitutes to Apple
products are readily available in the market. For example, instead of using iPhones, people can
use digital cameras to take pictures, and landline telephones to make calls. Thus regular
innovations and technological advancement is necessary for Apple to sustain in market for long.
Bargaining Power of Buyer: The presence of detailed comparative information about
competing products’ features empowers buyers to shift from one provider to another. This
external factor enables buyers to exert a strong force on Apple. Therefore, Apple must include
the bargaining power of buyers or customers as one of the most significant strategic variables in
the business.
Bargaining power of Suppliers: There are numerous suppliers who can provide raw
materials easily in this industry so the suppliers have less power to charge from company
according to them (Winterhalter, Zeschky and Gassmann, 2016). Bargaining power of suppliers
is a minor issue in developing Apple Inc.’s strategies for supply chain management, value chain
effectiveness, innovation, and industry leadership.
By analysing the above factors it has been concluded that to remain in the market and to
gain growth rapidly, companies need to offer new and innovative technology at marketplace.

(Sources: Porter's Five Forces. 2020)
CONCLUSION
From above made discussion it can be said that innovation is the most appropriate tool
which organisations used so that they are able to use it for increasing the sustainability of the
organisation. It is analysed that innovation in organisation is very helpful in improvement of
brand name in market. PESTLE analysis is used by organisation so that various factors related
with external environment can be studied and understood to ascertain future capabilities of
organisation. Lastly, overall view of industry can be elaborated and understood with help of
porter's five force model. These are some of tools & techniques which organisation use in order
to develop some strategies relate with growth.
Illustration 1: Porter's Five Forces

REFERENCES
Books and journals
Biemans, W., 2018. Managing innovation within networks. Routledge.
Bieraugel, M., 2015. Managing library innovation using the lean startup method. Library
Management. 36(4/5). pp.351-361.
Cohendet, P., Parmentier, G. and Simon, L., 2017. 13. Managing knowledge, creativity and
innovation. The Elgar companion to innovation and knowledge creation, 197.
Duarte, N. T., Goodson, J. R. and Dougherty, T. M. P., 2014. Managing innovation in hospitals
and health systems: Lessons from the Malcolm Baldrige National Quality Award
Winners. International Journal of Healthcare Management. 7(1). pp.21-34.
Lawrence, T. B., Dover, G. and Gallagher, B., 2014. Managing social innovation. The oxford
handbook of innovation management, pp.316-334.
Lind, J., 2017. The role of accounting for managing innovation processes when relationships
matter. IMP Journal. 11(1). pp.7-24.
Malhotra, A. and Majchrzak, A., 2014. Managing crowds in innovation challenges. California
Management Review. 56(4). pp.103-123.
Pekuri, A., and et. al., 2014. Managing value creation: the business model approach in
construction. International Journal of Business Innovation and Research. 8(1). pp.36-51.
Sund, K. J., and et. al., 2016. Managing tensions between new and existing business
models. MIT Sloan Management Review. 57(4). p.8.
Tell, F., Berggren, C. and Van de Ven, A. H. eds., 2017. Managing knowledge integration across
boundaries. Oxford University Press.
Tidd, J. and Bessant, J., 2014. Strategic innovation management. John Wiley & Sons.
Wang, C. J. and Tsai, C. Y., 2014. Managing innovation and creativity in organizations: an
empirical study of service industries in Taiwan. Service Business. 8(2). pp.313-335.
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.
Online
Apple Inc. PESTLE Analysis. 2020. [Online]. Available through:
<https://pestleanalysis.com/apple-pestle-analysis/>.
Scanning the Environment: PESTEL Analysis. 2016. [Online]. Available through:
<https://www.business-to-you.com/scanning-the-environment-pestel-analysis/>.
Porter's Five Forces. 2020. [Online]. Available through:
<https://www.mindtools.com/pages/article/newTMC_08.htm>.