An In-Depth Analysis of Innovation Management at Apple Inc. (BUS101)

This report provides a detailed analysis of Apple Inc.'s innovation management, examining its strategies, performance, and competitive advantages. The executive summary highlights the importance of innovation for business effectiveness, focusing on Apple's product development, market analysis, and technological advancements. The report delves into Apple's innovation history, existing innovations, and performance capabilities. It applies the 4 Ps of innovation (product, process, position, paradigm), EST analysis (economic, social, technological factors), VRIO model, and Porter's Five Forces to assess Apple's market position and competitive landscape. The report covers key products like the iPhone, iPod, and iPad, and evaluates their impact on revenue and market share. It also explores Apple's organizational structure, culture, and leadership, providing a comprehensive view of how Apple Inc. manages innovation to achieve business success.

Managing
Innovation In Business

EXECUTIVE SUMMARY
It is necessary for a company to adopt innovation because by it they able to conduct its
work in effective manner. Now a day audiences or service users are also more attracted towards
the unique as well as innovative products so it become necessary for a company to conduct
evaluation of marketplace in order to understand need and requirement of customers which
directly help in developing in technology. That will help company in enhancing their profitability
ratio and market shares. Apple Inc. is conducting its business operation and function at hardware
and software industry. The respective company is established by Steve Jobs in the year 1976.
they offer variety of products and services such as iPod, iPhone, Home Pod, iOS, iLife, App
Store and it is offered by world wide level. Products and services which are offer by company
are highly technological based which attract customers as well as they also adopt new and
innovative technology. This will make respective company successful along with this they also
free their research and development department that they can conduct or design in their way.
They also didn't need to worry about financial budget or resources.
This will include various topics which are related to evaluation of innovation adopted by
respective company in order to attract customers and succeed their business. In order to know
and understand effectiveness of innovation for respective company they will adopt 4 P's of
innovation. That will include products, process, position and paradigm. Through this they able to
identify innovation and it effectiveness which help in growing business of Apple Inc. Along with
this they also conduct EST analysis which are factor of PESTEL Analysis as well as VRIO
model so that they can evaluate capabilities and performance in appropriate way. This will help
them in developing decision in effective manner. Apple Inc. adopt porter's five force model so
that they can know about their competitive advancement factors. By adopting this they able to
conduct analysis of hardware and software industry which help in evaluating respective company
and their competitors evaluation. By adopting as well as conducting all these models or theories
Apple company able to understand importance of innovation and how it will impact on
operations as well as function of a company in positive manner.

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY ..................................................................................................................................1
The organisation and its innovation.......................................................................................1
The organisations existing innovation Performance and capabilities....................................3
The industry in 2019...............................................................................................................6
CONCLUSION ...............................................................................................................................7
REFRENCES...................................................................................................................................8
.........................................................................................................................................................9

INTRODUCTION
Innovation is essential for every organization because by it company able to conduct its
business functions in effective manner. Innovation refers to a procedure of creating an idea into
products and services which help in attracting customers and convince them to pay (Dončić,
Perić and Prodanović, 2015). Organization taken for this assignment is Apple which was
established by Steve Jobs in year 1976. Its headquarter is in Cupertino, California, United State.
They offer variety of products such as iPod, iPhone, Home Pod, iOS, iLife, App Store and many
more at the worldwide level. Topics covered in this report are innovation history of company,
company's existing innovation, performance and capabilities. It will also include current
situation of respective company in particular industry.
MAIN BODY
The organisation and its innovation
Apple Inc. is an American company which operate its business at worldwide level. Its
headquarter is in Cupertino, California, United State. It is founded by Steve Jobs, Steve Wozniak
and Ronald Wayne in year 1976. The respective company offer variety of products and services
such as Macintosh , iPhone, iPod, Home Pod, iWork, Final Cut Pro, App Store, Apple News +,
tvOS, Logic Pro and many more (Du and ZHANG, 2012). Respective company adopt innovation
on regular basis which help them in attracting customers and retain at market for a long period of
time. Innovation of Apple is properly understood by adopting four P's of Innovation, which is
mentioned below:-
Product: There are numbers of innovative products and services which are offer by Apple Inc.
which attract customers at huge ration and encourage them to purchase their products. Some of
the major innovative products offer by respective company which make them successfully at
marketplace are- iPhone: Apple is the first company which introduce smart phone having multiple touch
i.e. Apple iPhone. It generally seems as mixture of both iPod and smart phone. The
respective company introduce many versions of this phone and always they come up
with new innovation (Apple Marketing Mix (4Ps) Strategy, 2019). Latest iPhone which
respective company had launched is iPhone X and iPhone Xs.
1

 iPod: It is one of the innovative products because it is a potable digital music player.
There are various versions of respective products are available at a marketplace such as
iPod Nano, iPod Touch and many others.
Process: Product development procedure which is adopted by respective company is very
innovative which make them a successful company. Apple designing team is free to take its
decision they didn't need to report to finance, manufacturing department and other. The
respective company has given free rein to its research department which help them in developing
products which is attractive as well as innovative (Apple’s Product Development Process –
Inside the World’s Greatest Design Organization, 2019). Along with this respective company
also conduct review meeting in order to examine each and every products that company is
designing or developing.
Position: Respective company adopt unique and innovative strategies for positioning its
products and services. There positioning strategy is highly different which attract customers.
Apple position them as a lifestyle brand which manufacture innovative products design,
attractive interface design, exterior design and interior design (Apple’s ‘Creative’ Brand
Position, 2019). Along with this it is positioned as a luxury brand which conduct huge emotional
connection as well as loyalty among their customers.
Paradigm: It refers to particular innovation category which is adopted by a company in order to
conduct its process in effective manner so that they can attract customers as well as attain goal
properly. In respect of Apple they adopt paradigm in their process so that they can develop as
well as sold products and effective manner. The iPad of respective company is unique and
attractive which can be seems through its sales i.e. in just 28 days 1 million iPads had sold which
is more faster than selling of iPhones (Has Apple invented a whole new paradigm for
computing?, 2019).
Innovative performance:
 iPod: Apple launch this in year 2006 with the name of “iPod Classic”. It is first potable
media player which have black and white LCD screen as well as it has 5 GB of memory
for storing songs. It also have approx 1000 audio tracks that is in MP3 mode or formate
(Apple's 7 Most Innovative Devices Through the Years, 2019). the respective company
generate approx $66 million in quarter of launching respective products.
2

 iPhone: It is consider as source of generating half of the company's revenue. The first
generation iPhone have voice activated assistant i.e. Siri which is installed in 4s and then
they introduce touch ID fingerprint sensor in nest model i.e. 5s. Now respective company
is come up with number of new innovative features in iPhone. Through iPhone company
able to generate $8 billion of revenues as well as $786 million net income (Apple
Revenues and Profits 2000 to 2015: Pre- and Post- iPhone, 2019).
 iPad: It is first launched in year 2010. it has various features like 9.7 inch touchscreen.
Then in 2012 respective company launch iPad mini whose size is 7.9 inches as well as it
has retina display feature and ID touch fingerprint sensors.
Apple spend approx $15 billion per year in research and development activities which
help them in finding new innovation that leads to enhancement in profitability ratio as well as
market shares (In defense of Apple’s $14 billion R&D budget, 2019).
The organisations existing innovation Performance and capabilities
In order to evaluate existing performance and capabilities an organization can adopt
various theories and methods so that they can understand it in effective manner (Gobble, 2012).
In respect of Apple Inc. they adopt EST analysis for evaluating performance and VRIO model in
order to analysis capabilities which they adopt in order to acquire innovation in proper manner.
Explanation of which is given below:-
EST Analysis:
It refers to impact of economical, social and technological factors which will impact on
the business in negative or positive manner. It is essential for a company to develop their
strategies accordingly so that they can analysis effectiveness of innovation at their working.
Evaluation of which are explain below:-
 Economical Factor: According to this factor due to increase in labour cost at china some
products of repetitive company face decline situation. Moreover due to strong U S dollar
there is enhancement in exchange rate which increase budget of Apple for conducting
business in some companies such as Europe as well as China (Apple Inc. PESTLE
Analysis, 2019). But due to innovation and technology used by respective company, they
get opportunities to grow their business in effective manner at different different
location.
3

 Social Factor: The product and services developed by respective company market
themselves at international market as a leading company. Along with this if a person is
using products and services of Apple Inc. it will seems as a status symbol. So they
develop innovative products in order to attract more and more customers. This will also
help in identifying opportunities for respective company (Apple Inc. SWOT & PESTLE
Analysis, 2019). Now a day purchasing power of customers get increased due to which
they get inconvenienced to purchased expensive innovative products which are
innovative and unique.
 Technological Factor: It is necessary for a company to adopt technological factors in
effective manner so that they can attract more and more customers. In respect of
respective company they adopt new technology which help them in developing
innovative products that attract services users and make them loyal (Khan, Alam and
Alam, 2015). Some of their products which include effective technology are Apple T V,
iPod, iPhone, App Store and many more.
SWOT Analysis:
Strength Weakness
 The respective company have strong
brand image.
 They have huge number of loyal
customers who have good customers
experiences.
 The respective company also provide
best services to their customers which
help in retaining service users.
 They are mainly focuses on research
and development.
 The one of the major weakness of
respective company is their
competitors.
 Death of Steve jobs also seems as
weakness for respective company
(Swot Analysis Of Apple, 2019).
Opportunities Threat
 They can expand their business in
China as well as India.
 They can also come up with new range
 The threat for respective company is
decline in sales in sales such as
situation arise in china.
4

of products such as smart phone at low
price (Patti, Yanes and Siuzdak, 2012).
 They can also expand their number of
retail stores so that customers contact
them effectively and easily.
 There are various other companies
which compete respective company
such as Sony, Asus, Dell, Lenovo,
Samsung and many more.
Through this Apple Inc. able to know their competences and resources which help them
gaining competitive advancement. Through this they also able to attract more and more
customers in order to enhance profitability ratio as well as market price.
Capabilities of Apple Inc.:- Structure: The organization culture adopted by Apple Inc. is hierarchical
organizational structure in which they divide whole department and delegate the
authority so that they all conduct their work in effective manner (Apple Inc.’s
Organizational Structure & Its Characteristics (An Analysis), 2019). Culture: Business culture adopted by respective company is that they equally treat their
employees, they take suggestions form their staffs. Along with this they also understand
and develop policies and procedure according to their staffs requirement.
 Leadership: The leadership style which is adopted by respective company is
democratic leadership style. In which they involve their team member and employees in
decision making process (Apple Leadership: a brief overview, 2019). By which
employees fell motivated and provide their 100 % for attaining goal and objective.
 Financial: Current financial capabilities of Apple is that in 2016 they are expanding
approx $2.8 billion and now they are developing budget of $10 billion in current year. In
current year quarter they generate revenue between $55 billion and $59 billion. Along
with this their other income or expenses is of $300 million.
 Human: There are 1,32,000 employees are working in respective company on full time
basis. These employees are highly skills and capable which help company in attaining
their target. Working space of this company office is 16.5 million square feet (Apple
Now, 2019).
Through these competences respective company able to attain their goal as well as target
in effective manner. This will also motivate employees which leads to accomplishment of work
in effective and appropriate way.
5

The industry in 2019
In order to analysis situation of current status of industry in which Apple Inc. is operating
project manager can adopt various models as well as theories. Here porter's five force model is
used through which a company able to know its competitive advancement and attractiveness. It
is developed by Michael E. Porter. It is conducted by a company in order to understand of a
particular industry or a company (Teece, 2012). So in context of respective project manager
conduct analysis of smartphone industry so that they can understand about its effectiveness.
Analysis of which is given below:-
 The threat of new entrants: Hardware and software industry is one of the profitable as
well as leading industry. But here threat of new entry is low due to various reasons such
as it required huge amount of capital which not possible for each and every company. In
respective industry customer's loyalty is high towards existing brand. At this industry
companies need to constantly adopt new and innovative technology which is not possible
for every company which newly entry at market so here threat is low.
 Bargaining power of suppliers: In respect of power of suppliers in respective industry it
is moderate. There are major two type of suppliers in this industry that is manufacturer of
hardware as well as software developer. In context of this there are so many sources
which develop software for a company so here bargaining power of suppliers is less or
low (Porters 5 forces for mobile industry, 2019). But there are few software develop
which develop innovative and creative technology due to which their bargaining power
of these suppliers are high. So by evaluating both the situation it can be conclude that the
bargaining power of suppliers is moderate.
 Bargaining Power of Buyers: It refers to the situation when customer get huge numbers
of options of substitute products and services. In respect of hardware and software
bargaining power of buyers is high because there are various companies which offer
same kinds of products. So in this situation customers get huge options so they can
bargain in order to get good quality product at low price.
 Rivalry companies: It refers to the situation when there is huge number of competitors
available at the marketplace and they offer same kind of products and services. This will
directly impact business of another companies (Union, 2014). In respect of hardware as
well as software industry there are multiple companies are operating its business such as
6

Apple, Samsung, Nokia, Black Berry and many more. Due to this competitive rivalry is
high in respective industry.
 Threat of Substitute Products: It refers to threat which is generated through substituted
or similar products as well as services. In respect of hardware and software in which
Apple is dealing the threat of substitute products is moderate (Wonglimpiyarat, 2012).
This is so because there are numbers of companies who offer smart phone of all range in
respect of price. Along with this some companies adopt new technology at regular basis
in order to develop more attractive smartphone such as Apple, MI and many more.
CONCLUSION
Form above discussed point it can be conclude as well as evaluate that innovation plays
an essential role in succession of business. This is so because by it they able to attract more
customers and encourage them to buy their products as well as services. By adopting proper
innovation company able to introduce new products and services, adopt new process which help
in conducting work properly and many more. In order to evaluate existing innovation and
capabilities of a company in order to innovation they can adopt factors of PESTEL analysis.
Moreover for examine the current industry a firm can conduct analysis through porter's five
force model.
7

REFRENCES
Books and journals
Dončić, D., Perić, N. and Prodanović, R., 2015. Holistic marketing in the function of
competitiveness of the apple producers in Bosnia and Herzegovina. Economics of
Agriculture/Ekonomika Poljoprivrede. 62(2)..
DU, S. B. and ZHANG, J. K., 2012. SWOT Analysis and Proposals on Development of Organic
Apple in Yan'an Mountain Area. Northern Horticulture. 7. p.070.
Gobble, M. M., 2012. Innovation and strategy. Research-Technology Management. 55(3).
pp.63-67.
Khan, U. A., Alam, M. N. and Alam, S., 2015. A critical analysis of internal and external
environment of Apple Inc. International Journal of Economics, Commerce and
Management. 3(6). pp.955-961.
Patti, G. J., Yanes, O. and Siuzdak, G., 2012. Innovation: Metabolomics: the apogee of the
omics trilogy. Nature reviews Molecular cell biology. 13(4). p.263.
Teece, D. J., 2012. Dynamic capabilities: Routines versus entrepreneurial action. Journal of
management studies. 49(8). pp.1395-1401.
Union, I., 2014. Communication from the Commission to the European Parliament, the Council,
the European Economic and Social Committee and the Committee of the Regions.
Brussels.
Wonglimpiyarat, J., 2012. Technology strategies and standard competition—Comparative
innovation cases of Apple and Microsoft. The Journal of High Technology Management
Research. 23(2). pp.90-102.
Online
Apple Marketing Mix (4Ps) Strategy. 2019.[Online]. Available
through:<https://www.mbaskool.com/marketing-mix/products/16812-apple.html>.
Apple’s Product Development Process – Inside the World’s Greatest Design Organization.
2019.[Online]. Available
through:<https://www.interaction-design.org/literature/article/apple-s-product-
development-process-inside-the-world-s-greatest-design-organization>.
Apple’s ‘Creative’ Brand Position. 2019.[Online]. Available
through:<https://www.thebrandspecialist.com/apples-creative-brand-position/>.
Has Apple invented a whole new paradigm for computing?. 2019.[Online]. Available
through:<http://business.rediff.com/column/2010/may/04/has-apple-invented-a-whole-
new-paradigm-for-computing.htm>.
Porters 5 forces for mobile industry. 2019.[Online]. Available
through:<https://www.slideshare.net/gauthamreddy39/porters-5-forces-for-mobile-
industry>.
Apple Inc. SWOT & PESTLE Analysis. 2019.[Online]. Available
through:<https://www.slideshare.net/NinadJape1/apple-inc-swot-pestle-analysis>.
Apple Inc. PESTLE Analysis. 2019.[Online]. Available
through:<https://pestleanalysis.com/apple-pestle-analysis/>.
Swot Analysis Of Apple. 2019. [Online]. Available through:<http://dicle.sticken.co/swot-
analysis-of-apple/>.
8

Apple Inc.’s Organizational Structure & Its Characteristics (An Analysis). 2019.[Online].
Available through:<http://panmore.com/apple-inc-organizational-structure-features-
pros-cons>.
Apple Leadership: a brief overview. 2019.[Online]. Available through:<https://research-
methodology.net/apple-leadership-and-apple-organizational-structure/>.
Apple's 7 Most Innovative Devices Through the Years. 2019.[Online]. Available
through:<https://www.cheatsheet.com/technology/apple/apples-product-timeline-the-
best-of-the-best.html/>.
Apple Revenues and Profits 2000 to 2015: Pre- and Post- iPhone. 2019.[Online]. Available
through:<https://revenuesandprofits.com/apple-revenues-and-profits-2000-to-2015-pre-
and-post-iphone/>.
In defense of Apple’s $14 billion R&D budget. 2019.[Online]. Available
through:<https://www.ped30.com/2019/03/10/defense-apples-14-billion-rd-budget/>.
Apple Now. 2019.[Online]. Available through:<https://www.macrumors.com/2018/11/05/apple-
2018-form-10-k-highlights/>.
9