CW2: Individual Report: Managing Innovation in Apple Inc (2020)

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Managing Innovation in Business
CW2: Individual Report
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Executive Summary
Innovation is an important aspect adopted by organisations for the growth of the company in a
systematic manner. It is useful, as the businesses are regarded to make the utilization of their
fund, which is important for the business. The company Apple will plunge into the utilisation of
the main devices that could be innovated for the year 2020. As per annual reports, the company
has indicated a rise in the profit margin, which has affected the efficiency of the company. It is
important and relevant, as the businesses are confined to make the use of materials, which could
steer the growth and productivity of the company.
Therefore, there is significance to the utilisation of the innovation capabilities, important to the
company. This is the primary unit, which would be affecting the sustainability and the reliability
of the company to performance, which is related to the importance of the business. Therefore, the
importance of the company has been taken into consideration, which has given way to the
development and the research of the company in a better manner. Therefore, as per the
understanding of the concepts related to the research, there are areas that pertain to the growth of
the business in a better manner.
The process of implementing innovative products in their portfolio enables the company to
generate better results in the business scenario. The operational plan of developing 5G modems
through the integration of Intel products in the product range would provide the organisation
with the opportunity to succeed in the competitive market sector. The liabilities that the brand
may consider during the acquisition of multiple start-ups in the business process would provide
the company with better scope of generating profits. The successful implementation of 5G
modem in their existing product range and developing new iPhone models that would operate in
the market by 2020 and beyond is identified in the study. The aid of organisational acquisitions,
mergers and experimentation within the innovation process would provide Apple Inc with the
opportunity to generate better results in the market sector.
The study presents a valid and effective innovation plan for Apple Inc in designing products that
are relevant to the business aim of the company. The plan to present their customers with newer
models of iPhones that support 5G network and are cheap would be attained by 2020 and
onwards if the organisation follows the devised plan in their product innovation process.
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Table of Contents
Introduction......................................................................................................................................4
The Future of the Industry 2020 and Beyond..................................................................................5
The Organisation’s Innovation requirements 2020 and beyond......................................................7
Building the Future Innovation Capabilities for the Organisation................................................11
Conclusion.....................................................................................................................................17
Reference List................................................................................................................................18
Appendix........................................................................................................................................20
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Introduction
The term ‘innovation’ in marketing plays an important role in the creation of effectives products
and services, with generation of better business ideas. Business managers implement the
utilisation of innovation for the improvement of existing products and so on. The purpose of the
report is to elucidate a comprehensive approach on the CW1 findings, which are related to the
multinational technology company Apple.
The report follows a comprehensive approach to the CW1 findings, and depicted that the market
share of the company was strong as per the findings. In the latest research analysis of the
company, the company was focused on improving upon the telecommunication and services
that were integrated with the company. This provided a strong ground for the background of the
company. Therefore, as purported in the findings, the report aims at providing a critical
understanding on the future capabilities of the company in the year 2020. In the current scenario,
the main competitors of Apple are Dell, Lenovo, Samsung, Asus, Sony, Microsoft, and so on.
The company is subjected to the utilisation of legislative duties are “Environmental Safety Act”,
“Apple Supplier Code of Conduct” and so on. This will be useful for a further better analysis
into the research.
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The Future of the Industry 2020 and Beyond
The future growth for Apple Inc in the consumer market sector is identified through the
increased sales and profitability the organisation experiences in their business operations. Apple
Inc operates as a major consumer electronics developer with annual earnings of $11.5 billion as
reported in their second quarterly financial reports. According to the reports developed by Apple
Newsroom (2019), the company has increased their market share by 61% in the second quarterly
sales. The organisation’s development in creating home appliances, wearable devices and
consumer accessories has enhanced the company’s growth in the competitive transactional
economy of consumer electronics and software sector.
Technological advancement in collaboration with multiple external factors such as the legislative
developments regarding software utilisation stands to affect the businesses operating in the
business sector. The growing issue of economic crisis among the customer segment influences
the business development plans for organisations such as Apple Inc, Google, Samsung and
several other consumer electronic appliance manufacturers are in competition for developing
products that provide consumers with the best experience at low cost (Gibbs, 2019). The
universal trend in the market sector provokes the organisations to design products that are
innovative, sleek and unique at low cost. The advent of Chinese mobile manufacturers with
appliances that provide the consumers with cutting-edge technology at low price presents the
global market for consumer electronics with the scope of creating better products.
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Figure 1: Future 2020 trends in consumer electronics
(Source: Hasch, 2015)
The level of competition among the key operators in the industry would increase by 2020 due to
the development in technology and the economic pricing that companies aim to follow in their
product development ideas. The trends that the consumer technology industry would experience
in the growth by 2020 include the generation of wireless technology. The advent of 2020 in the
world of mobile technology would view the brilliance of 5th generation of wireless technology.
Consumer electronic manufacturing bodies such as Apple Inc, Samsung, Google and other
Chinese start-ups rely on the growth of 5G technology and plans to develop their products
accordingly. The innovative use of block-chain, Artificial Intelligence and Virtual Reality in
software development and consumer electronics would prove successful in the customer arena by
2020.
The competitive business scenario of consumer electronic goods and software development aims
to create products by 2020 that would enhance the user experience and increase the speed and
efficacy of technology in the business environment. Apple Inc’s decision to enhance their
business in the market sector using increased plans of merger would prove beneficial for the
company through the acquiring of better technological knowledge. The legislative developments
that the organisation aims to generate are identified by their product development plans for 2020
(Alspach, 2019). The pricing strategy followed by consumer electronics developer, Apple Inc
provides information regarding the plans of the company for 2020 in providing their consumers
with the scope of purchasing newer models at low price. As observed in the future plans devised
by major consumer electronics manufacturers, the need for developing economic products is
evidenced for the success of the organisations in the consumer electronic industry for 2020 and
beyond (Bloomberg.com, 2019).
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The Organisation’s Innovation requirements 2020 and beyond
The organisation Apple is dedicated to produce better telecommunication and technological
services that are required for the growth of the company. As per, its innovation requirements of
2020, it can be deduced that the company does look forward to the utilisation of strategy
statement which is an important part of the research. As per the strategy statement, Apple aims
at incorporating the best user experience to its customers through innovative software and
hardware. The business objectives of the company as per Apple are to expand its digital platform
with digital content and services. The scope of the market is to have its business operations in
global platter. It strategizes its market by providing a high quality buyer experience through
improvement in their distribution strategy. The competitive advantage of the company is the
brand strength, innovation in products, premium pricing and so on. As per the annual report of
Apple, it is reported that Apple was dedicated to the utilisation of digital operating systems such
as iPhones, Mac, iPad Apple Watch, Apple pad and so on. Its financial standing reported in the
year 2018 53.3$ dollars with an increase in 17 percent. The company has been faced with
competition from digital content services through its tough competitors.
Figure 2: Apple’s distribution strategy
(Source: Cuofano, 2019)
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Hence, as per the finding of the annual report of the company’s international sale, accounted for
37% and 63% respectively (Annualreports.com, 2019). Therefore, this accounted for the
understanding of distribution and strategy statement of the company as per its business
undertakings.
The major opportunities that influences Apple Inc’s innovation requirements ensure the
company is able to generate better products in the future for their consumers using technological
advancement and economic measures. Apple Inc resorts to developing iPhones with OLED
screens and supports 5G communication through the implementation of Intel 8161 5G modems.
As per the strategic planning model framed by Apple Inc, it can be stated that the company plans
to develop better models of iPhone with improved battery power to support the integrated
performance that 5G claims to provide the users. A viable threat that could hinder the company’s
implementation of the modem in their product design includes the legal issue with Qualcomm,
which reduces the scope of the company in implementing other modem models in Apple Inc’s
products. As per the second quarterly report of Apple Inc, it has been observed that Intel is
lagging behind in developing the 8161 5G modem for the company to implement in their new
iPhone models.
Considering the future planning of Apple in developing products that provide their consumers
with better models at low cost and highly competitive against products designed using similar
technology by other competitors such as Google, Samsung, Asus and other brands in the market.
Despite the growing threat from the competition in the market sector of consumer electronics,
Apple Inc holds the second largest market share against Samsung, the company’s aim to present
5G phones in the market holds key potential for success (AppleInsider, 2019). The possible
products from apple Inc that could dominate the market by 2020 and beyond is based on the
technological advancements that the company implements in their product development and
marketing tactics. New models of iPhone, Apple watches and the new range of home appliances
that the company plans to deliver in the market sector would provide the company with the
opportunity to gain competitive advantage.
Application of the Porter’s Five Forces Analysis for Apple
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In order to comprehend the competitive advantage of the company Apple, it is beneficial to make
the utilization of the Porter’s framework.
Threat of new entrants: The Company has a strong brand image and customer service portals
that the company provides. Therefore, the threat of new entrants is low as the new entrants’
would pose difficulty for the provision of the other companies that try to make an entry because
of the market would not be able to relate to the supply chain cost structure of the market,
Bargaining power of suppliers: The power of the suppliers that are attuned to bargaining is
considered low because of the innovation capabilities of the company. The company makes the
utilisation of its own chips and reduced the manufacturing equipment of the products through
their good brand strategy and strength
The buyer’s bargaining power: The bargaining power of the buyer is considered low, as the
switching costs are generally high. The company is subjected to make the utilization of switching
the costs that are purported to the growth and the efficiency of the customers.
Figure 3: Porter’s Five Forces analysis
(Source: Medium, 2019)
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Competitive rivalry: Apple Inc experiences high competitive rivalry from their business
competitors in the market segment. The presence of Chinese electronics manufacturers provides
Apple Inc with the increased threat of cheaper products for similar customer segments.
Threat of substitute products: The presence of multiple substitute products reduces the scope of
Apple Inc’s growth in the future despite the plans for developing 5G phones by 2020 in the
market sphere. Apple Inc’s legal issue with Qualcomm presents the company with the scope of
utilising Intel products despite the company’s lack of faith in Intel’s consistence in providing
services. The increasing growth of Chinese products and the shift of consumers to android
enabled gadgets act as a serious threat for Apple Inc in continuing their business operations
(Mathooko, 2015).
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Building the Future Innovation Capabilities for the Organisation
The process of innovation regarding their production process for implementing new 5G modems
within their iPhone models and home appliances would require Apple Inc to follow strategic path
of product manufacturing. The following section provides a detail plan regarding the innovation
process that the company needs to maintain in order to achieve their future product development
plan:
Incubator: The incubator stage of innovation enables the organisation to develop products
relevant to the market through the integration of several start-ups that would lead Apple Inc to
generate better results in their product development. The process allows the brand to develop
tactics that enhances the application of smaller start-ups within the operational structure of the
company (Gerlach and Brem, 2015). The implementation of 5G modems in Apple’s new
products requires the brand to integrate start-ups that would provide the company with
innovative ideas in developing their products. The need for including new technology of the
start-ups in product development would be enabled through the nourishment, financial aid and
digital support that Apple Inc could provide to the smaller organisations.
Crowd sourcing: An ideal scenario for the company to develop products that are in accordance
with the customer demands is by developing an understanding of the market demands. The
process of crowd sourcing in innovation process enables organisations to develop tactics that are
beneficial for the company in generating ideas through communication with the customers. This
can be performed by apple Inc through surveys and elaborate market research for recognising the
attributes of public opinion regarding their new phones and 5G modems. The process of mergers
and acquisitions enable the brand to procure fresh ideas of product development. The acquisition
of Stamplay, Laserlike and Spektral provides Apple with the opportunity to develop smarter
phones and UIs in their iPhone models (Horwitz, 2019).
Crowd funding: The Company Apple, in integrating innovation practices, for the company
would be creating an iPhone with the use of Intel 5G modem. Therefore, crowd funding is an
important aspect in the integration of the funds that would be required for the business. This
would be further supported through the utilisation of customers and so on for the growth of the
company in funding the technology to the individuals. Therefore, the funds that would be
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exchanged would be reward based (Evans, 2019).This implies that the company will be making
the innovation in their models, by investing in pursuit of rewards. The company would be
making the utilization of the donation-based funding for the iPhone. The company can
outsource the people using these applications by crowd sourcing using customer people and so
on. This would be important for the company in getting better results for the business.
Customer centric: Apple would be investing in the production and manufacture of their iPhones
with the utilisation of Intel 5G modem. As per the identification of the sources, available for the
company, the business would be able to be customer centric in nature and attract a new customer
base. This would be vital for the development of the business, and would be useful for the
comprehension of the new technology to the customers. Although, the business has been able to
provide to the customers on behalf of growth opportunities for the business undertaking, there
have been considerable growths. The business Apple has always been integrated towards the
demands of the customers while launching their products and services (Spice Catalyst, 2019).
This is vital for the businesses to bring in the best approach for the companies integrating in the
use of the business services.
Experimentation: The organisation needs to experiment integration of multiple types of AI
based technology within their product development phases, to ensure the success of the company
in launching innovative products in the market. By indulging in experimentation with their
traditional models of iPhones, the company would be able to develop better tactics in attracting
more consumers. Considering the highly competitive business scenario for the company, the
utilisation of experimental production procedures would help the brand to succeed in launching
new products. The relation between experimentation and innovation within an organisation’s
product development procedure is observed through the growth of ideas and creation of
innovative products in their portfolio (Lindgren and Münch, 2016).
Adaptability: Apple can make the utilisation of the new technological innovation to adapt with
the better use of iPhones that might be used by the company. It is vital for the company to
procure an understanding of the needs and development of the company in a better manner.
Hence, if the company is able to adapt and process its implementation of services, using Kaizen,
it will develop in a better strategic manner. This will be vital for the comprehension of the
materials significant and vital to integration of innovation techniques. Hence, the company does
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