Innovation of Apple

MBA A Case Study on Innovation on apple Course Code MBA Cohort 22 Lecturer Mr. D. L. Allen Student Name Wong Man Pan Student ID entrance Date 18 July, 2012 No of words 3,092 1. Executive summary This obligate contains quaternion main surgical incisions in the first section, the characteristics of mutation Company be outlined, mainly the ideas which follow Barry, prat and Richard, 2011 and the overview of apple Inc transmutation would be evaluated ground on the factors found. In the second section, the affecting factors in management (Amabile, 1998 ) and mode (Ekvall, 1996) establish on orchard apple tree Inc would be discussed.Hence, both modernistic companies a good deal(prenominal) as HP and 3M execution of instrument would also be brought out . These threesome companies would be identify according to the three strategies suggested by Barry, John and Richard, 2011. Moreover, quaternion actions framework from Kim and Mauborgne, 2005 would be study with respec t to one application from orchard apple tree Siri. Finally, recomm leftoveration would be made for future study and challenge particularly since the key man Steve Jobs passed away in 2011. 2. Content 1. Executive summary2 2. Content2 3. Introduction3 4. five dollar bill elements of in advance(p) company apple Inc5 5. creative idea7 6. Managerial practices and organization climate for creativity7 7. Siri Four Actions mannequin11 8. end point and good word12 9. Reference14 3. Introduction Among the enterprises pursue innovation, orchard apple tree Inc is recognized as the nearly flourishing case. In 2011, Barry, John and Richard, 2011 conducted the survey and concluded that apple Inc is the or so innovational companies worldwide and the Exxon Mobil Corporation has been replaced by apple as the most worthful company in the U.S by market capitalization. Always in that location is a misconception for most stack, as heavy investment is the fundamental requirement to be the most innovative company. However it was found that orchard apple tree spend unaccompanied when around 2. 7% of revenue annually on R&D, comparing with Microsoft whom spend 14% of revenue, there is a big gap. It implies that the findings from Barry, John and Richard, 2011- spend more on R&D does non necessary cram results, the most crucial factors atomic number 18 strategic alignment and cultural influences that accommodate innovation.Therefore, this article mainly focuses on managerial practices, such as organisational and environmental bide, rather than how the investment was allocated. In the article of Barry, John and Richard, 2011, the innovative organization should focus on innovative outline, exploitive overall blood strategy, deep customer insight, keen talent and the right muckle of capabilities to jeopardy upon successful execution, all of these factors ar critical when identify the way of orchard apple tree Inc in accomplishing innovation.Simultaneo usly, creativity is the inspiration of organization and it is comfortably bear on by management and cultures. Two more innovative companies would be analyzed establish on Amabile, 1998 and Ekvall, 1996, orchard apple tree would be defined as quest seekers and engine room drives based on Barry, John and Richard, 2011. Innovation would be resulted as strong identification with customer experiences and passion for harvest-feasts this would drive the crossings with superior performance and quality.After the management and culture of Apple Inc is analyzed, one product Siri would be interpreted into account to show the result of innovation based on the four actions framework suggested by Kim and Mauborgne, 2005. Although Apple Inc stands for the top innovative company, it is essential to examine the strategy and act upon change especially when top management is altered. 4. Five elements of innovative company Apple Inc In the article of Barry, John and Richard, 2011, it is work out that innovation is not determined by the amount on R&D expending, the most vital factors ar strategic alignment and cultures which support innovation.In this section, five elements issued by Barry, John and Richard, 2011 would be studied. Focused innovation strategy of Apple would be started from the key element in Apples approach to innovation (Walter, 2011), focus on where you think you can introduce a significant contribution recognized and it was further confirmed by Steve Jobs when he returned to Apple in 1997, Steve cut the unnecessary product line, minify the number of cave ining products from 15 to 4.At that moment, entirely one or two sweet products were peculiar(a) to launch into the market annually, it attempted to obtain the team up power to concentrate on specific products study. Besides Apple Inc which only heavenly focuses on project and development, all the component and product fictionalization atomic number 18 outsourced, where it deals to approp riate the profit with the supplier and the vendor, but Apple inevitably start outs the largest portion.Effective overall business strategy is the combination of effective resources apportionment and business model, Apple Inc, not like other electronic subterfuge companies, it is the pioneer to perform value range of mountains integration. In the figure of Apple, 2011, it showed that only 40% of revenue is generated from the consumer electronic products like iphone and ipad, the large portion are generated from the Apps store and advertising agent. This means that the business model is no bimestrial relied on buy-off product it keeps the financial stability by ongoing gross sales from Apps store and advertising agent platform.The crucial point for Apple is that they do not need to invest tremendously on platform development as they are run by users and young apps are not developed by Apple itself but it shares the profit. This overall strategy is effective and sustainable to the whole free radical. Deep customer insight is defined as customer relationship quality, in other words, it is determined by products and operate where customer orientated. One of the innovation strategies from Apple was customer eccentric end users can not realize the needs until the products of Apple launched.The structure of the products chain is constructed by end users plus application, users get the electronic hardware from Apple which allows them to share and personalize their software of products finished the Apps store and iTunes, and this also helps the group to diversify the in germ base. Moreover through the breakthrough of mp3 and Discman player, it is easy to observe that Apple products like ipod and iphone, the feature is user friendly, such as users are easily to find the particular song within a minute among 1,000 stored file.Furthermore, looking for at the environment Apple store, it successfully created a fairly favorable atmosphere for customers, where a number of well trained ply would forge whatever problems from the products and always equipped with well manners and technical support. gigantic talent in Apple Inc could be said to be influenced by the company key man Steve Jobs, it is the dedicated person who clear Apple as an icon of innovation. According to Purkayastha and Syeda Qumer, 2011, most of the lasts of product development came from Steve.Also he inspired every staff in Apple to design and develop the products by thinking disparately and create an environment in which the people working in Apple would believe that they are better than the suspension (Purkayastha and Syeda Qumer, 2011). In recruiting staff, Steve put a large effort and resources on selecting the most outstanding talent on hardware, software, design and management. In the mind set of Steve Jobs, he believed that hire people who want to make the outgo things in the world and innovation comes from passionate, dedicated people.Indeed, there is no sp ecific R&D team in Apple Inc, all the development is based on objective orientation, featuring the right person and forming the team. The right set of capabilities to turn over successful execution, although there is no variety product from Apple, but it provides a total package to the customer. Apple has all self owned necessaries in the execution which is include but not limited to electronic device, military operation system development (iOS) and itunes platform with alliance with media company and apps developer, Apple does not need to rely on another company on the operations. . Creativity The presence of both individual and organisational creativity mechanisms led to the highest take aim of innovation performance (Sundar and Anil, 2000), it is essential to investigate the creativity in Apple, there are three components of creativity suggested by Amabile, 1998, they are expertise, creativity thinking skills and motivation. (i) Expertise means every professional noesis that people acquired and perform in the duties.Information technologies is the main core of Apple, hire people who want to make the best things in the world is one of the key elements in Apple approach mentioned at Walter, 2011, it implied that there are some experts in Apple. aside from I. T and design surface area, Apple also provides corporate service to different industries the team of consultant is required to produce a variety of industries familiarity in order to offer the total consultative solution in different area to different types of customer. ii) Creativity thinking skills are defined as the flexibility and imagination of people to solve the problems, many Apple products are originated from another companies, like ipod, the idea was come from Tony Fadell ( hit and Yuan-hong, 2012), after the adjustment of design with creativity thinking skills, the outcomes equipped the pocket size devices would be store 1,000 songs and quick search function that is far advance than ot her type mp3 players. (iii) Motivationdrives people to behave actively toward a craved goal and initiates, controls, and sustains certain goal.Appleattracts and retains employees in part owing to the benefits, or pass judgment and non-performance related incentives, it offers, such as product discounts or insurances, executives are rewarded by giving them a recognition bonus of 3 to 5 portion of their base salary. 6. Managerial practices and organization climate for creativity In Barry, John and Richard, 2011 findings spending more on R&D wont drive results the most crucial factors are strategic alignment and a culture.Inevitably, managerial practices affect creativity of whole organization, per Amabile, 1998 suggested that six general categories are challenge, freedom, resources, work-group features, supervisory shape upment and organization support. Apple Inc would be analyzed unneurotic with two more innovative companies in order to obtain a better understanding on the way m anagement of Apple encourage and develop innovation within the organization comparing with another innovative companies. Apple Inc HP 3MChallenge Apple followed 1031 approach, 10 entirely different mock up of the current design is required to provide by designer, only three designs would be selected, indeed engineer would work on the designs before the final stage. Although the process is coarse and consuming, Steve Jobs would drop all the finished concepts at very last minutes. Researchers are not limited to work in R&D area they can work across the different team and department on variety of projects like engineering and marketing team. Under the performance grade system, the salaries of individuals are determined by comparing with their peers performance. Salaries and promotions are tied to the products progress, for any newfangled product, when the sales grow to USD5M, the products originator becomes a project manager, at USD20-30, a department manager, in USD75M range, d ivision manager. 25% rules introduced A quarter of divisions sales come from the products introduced within the past five years. Freedom There is no restriction in the brain storm meeting, team member of development team is free to express their creativity consequently pass the proposal for further investigate on the feasibility and effectiveness. The management philosophy of HP is mutual trust and respect for individuals, everyone can make decisions on to the highest degree everything idea which related to their research work. Staffs in HP testing ground have flexible working hours. Staffs in 3M tend to be self-policing. There is no restriction for the staff moving from one business to another. Resources Diversity interlocking associations offer employees an opportunity to engage in professional support and networking activities. HP invest a lot on its R&D section and put R&D as the centre of business.The resources are come from HP Labs Bristol and their big partner like UK government. It provides advanced office create and world class facilities for research staff to perform their technological work. The researcher would grant special research funds to set up new projects USD 50,000 would be granted for the project pass the idea stage, a display board of technical experts and scientists concedes as many as 90 grants each year. Work-group features Apple worked on the concept of informal corporate culture even organizational structure is established.No issue the job post is high or low, they share the same open spaces for creativity. HP lab consists of many small units, individuals take responsibilities and work together as a team. The lab operates a flat organizational hierarchy, only three layers of management, scientist, manager and director. Every division are kept small, on average about USD200M in sales supervisory encouragement Management in Apple especially Steve Jobs created an environment in which employees were encouraged to beli eve that they are better than the others.The employee also would gain the benefits in the coaching and mentoring arrangement. With the trust and respect philosophy, the staffs do not have much interference from management and only simple regulations in the HP lab. precedential researcher would be assigned as a mentor for the new comers. Supervisor is easily be found in HP lab as they would participate in the regular coffee meeting and spending leisure time with researcher to get more idea on the on going activities. Tolerance of mistakes and all technical staff at coporate labs dedicate about 15% of their efforts toward learning and training programs in areas exterior their responsibilities. arrangement support Developmental program in Apple Inc is included 16structured on-the-job training. Workshops and training program is opened for everyone. Renowned experts would be invited in regular normal lecture and give talks to the staff. Recognized award in form of financial reward s would be encouraged to the staff that make particular contributions to the innovation, even the output is not suitable for commercialization would pipe down be patented. 15% rule allows anyone in 3M to spend up to 15% of work week on anything they wants, as long as it is product related. Small meeting rooms allows a small group of staff from different divisions even customer to exchange ideas. These six elements are akin to what Ekvall, 1996 suggested organization climate for creativity and innovation, and it plays an impact variable which interferes the results of organization operations.Based on the three strategies suggested by Barry, John and Richard, 2011, need seekers, market readers and technology drivers and then comparing with three innovative companies analyzed, it is induced that Apple Inc strategy is belonged to need seekers, with respect to the pioneer concept and ideas like itunes, apps store and siri, it satisfy the characteristic of shaping new products/services and being a leader to the market. At the same time, the technological capabilities allows them to have the whole product integration, range from run system iOS to hardware, it would be also defined as technology driver.In reviewing 3M innovation and new concept is come from customer and market needs with additive change to the products and being the fast followers in the market place, so 3M takes the market readers strategy. Finally with the advanced laboratory support and customer orientated, HP would be recognized as market readers and technology drivers. 7. Siri Four Actions Framework Creativity is easily found on every Apples product, the innovation involvement on one of the latest products Siri would be investigated based on the Kim and Mauborgne, 2005.Four actions framework suggested by Kim and Mauborgne, 2005 included (i) reducing factors which below the fabrications standard by applying voice recognized analysis technology in Siri, it simplifies the end user key in proce ss and clip the hardware and software application. (ii) Creating the products that the industriousness has never offered Siri offers accurate result through Voice to result to end users which is the pioneer to the market. (iii) Raising the factors above the industrys standard Siri allows users do not have any knowledge on computing which enhance the number of users from any background. iv) Eliminating the items that industry takes for granted, by applying Siri, keyboard, mouse and even touch screen would be eliminated. 8. Conclusion and recommendation According to the analytical result of the five elements on innovative company, managerial practices and four action framework on both Apple Inc and its product, it is identified that strategies of Apple Inc are need seekers and technology drivers, the products including but not limited to Siri totally reflect the result from individual and organizational creativity.There are many people worried about Apple future as the matter of fact that the key person Steve Jobs has resigned and pass away in 2010, although there is no immediately impact as innovation plan is usually lasted for 5-10 years, it is difficult to replace Steve who acted as spiritual leader and final decision makers in short period of time. It would be a golden chance for the company to readjust the policy especially on the decision do the decision power would be distributed to different project leader by absorbing more idea from the staff and redefining the standpoint.It would enhance the freedom in the whole organization and it is easily recognized the importance of freedom to the effect of creativity from the analysis of HP and 3M. No doubt, Steve is a symbol of Apple Inc, he was not only CEO, and he was also a new product pitchman. Now when Steve was passed away, people included investor and consumer would unilaterally associate the innovation and advanced technologies are all gone simultaneously, the confidential level of Apples products would be dropped.To put a stop, it would be grateful that the pass on of team spirit and performance be demonstrated to the public by putting focus on how individual and team affecting the result. The new product presentation should be introduced in form of team which allows the public forget the past image of Apple but it is important that retentivity the spirit of Steve eternally in form of brand image in order to consolidate the cohesion internally and externally.It is truly believed that Apple Inc is the most successful innovation company throughout the investigation base on theories suggested by Barry, John and Richard, 2011, Amabile, 1998, Ekvall, 1996, Kim and Mauborgne, 2005 and Sundar and Anil, 2000. Inevitably Apple Inc would face a great challenge as the change is necessary with the top management movement, with the best wishes on smooth passing the transitional period and sustaining the long established innovative image. 9. Reference 1. Barry, John and Richard, 2011 Barry,J , John,L and Richard,H. 2011, The global innovation 1000 why culture is key.New York Booz & Company Inc. 2. Amabile, 1998 Amabile, TM. 1998, How to kill creativity, Harvard business review. 76(5), pp. 77 87 3. Ekvall, 1996 Ekvall, J. 1996, Organization climate for creativity and innovation. European journal of work and organizational psychology. 5(1), pp. 105-123 4. Kim and Mauborgne, 2005 Kim, W. C and Mauborgne,R. 2005, Blue ocean strategy. Boston, Massachusetts Harvard business school press. 5. Walter, 2011 Walter, I. 2011, Steve Jobs. New York Simon & Schuster. 6. Ping and Yuan-hong, 2012 Ping,C and Yuan-Hong,L. 012, Comparison on innovation of high-tech corporation, Technoeconomics & management research. 292(5), pp50-54 7. Purkayastha and Syeda Qumer, 2011 Purkayastha,D and Syeda Qumer, M. 2011, Innovation at Apple, India IBS Center for management research. 8. Apple, 2011 Annual report 2010-2011. California Apple Inc. 9. Sundar and Anil, 2000 Sundar, B and Anil, M. 2000, Makin g Innovation Happen in Organizations Individual Creativity Mechanisms, organisational Creativity Mechanisms or Both? , Journal of product innovation management. 17(6), pp424-434