Apple Company Managing Innovation & Entrepreneurship

Introduction

Apple Company, which started its activity from assembling computers in a garage, is now regarded as one of the largest multimedia companies engaged in the sphere of cell phone sales, multimedia production manufacturing and computer industry. The innovative approaches of business performance and technical realization of the gadgets manufactured helped the company to renovate its reputation and become a leader in the sphere of multimedia production.

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The Apple iPhone provides a rich, interactive, mobile browsing experience that is different from other phone mobiles. The phone uses a full internet- like browser that shows complete websites. Entrepreneurship and innovation are continuous process in organizations and are complementary in enhancing business performance (Richardson 2010). The process of innovation starts with drivers of innovation following the technology push or market pull paradigm with a new need or technology. Innovation is viewed as a creative process and as an essential element of effective management structure and strategy for achieving growth in a company. Entrepreneurship on the other hand is considered in terms of individual or groups recognizing and acting upon opportunities in markets.

The aim of this paper is to analyze the business performance of the company from the perspective of innovations, promotion of the implemented innovations and further perspectives of technical, business, and advertising development. In general, the actual importance of business development should be considered from the perspective of innovations and technological development, as the ideas by Steve Jobs are generally deep and are not included into the standard frames of competition and innovations. (Bessant, and Tidd, 2007)

Background and innovation

Apple Company is in California and was founded in 1976 by Steve Wozniak and Steve Jobs. The company manufactures designs and markets computers, portable digital music, mobile communication devices and video players (Terziovski 2008). It also sells networking solutions, services, software, and peripherals. Apple iPhone Company sells its products worldwide through well established distribution channels. The company released the first touch technology iPhone in mid 2007.Apple launched its mobile phone called the iPhone in the United States and this marked the company’s entry in the highly competitive mobile phone market. In the first two days of the iPhone launched, the company’s iPhone sales ranged from 500,000 to 1 million units.

Apple released software developer kit in advance of the iPhone launch to enable independent companies to create new applications for the iPhone. This has led to a surge of software development creating new applications that have turned the iPhone into a game console, a musical instrument, a navigation tool, a web browser device and a medical imaging. The iPhone have far-reaching implications for the wider use of the mobile web for advertising and hence also poses a threat to companies like Google (Trott 2008).

Opportunity recognition

The opportunities of the newly implemented gadgets were closely associated with the principles and practices of the innovations that formed the image of the new products. These opportunities were closely associated with the expectations of the company and the target audience. However, there was still a lot of expectations as far as a multimedia mobile phone is concerned, which would encompass various computer programs to increase the multi-usage needs including entertainment. The open opportunities meant that Apple had the opportunity to increase its innovative skills in order to fill the gap. Steve Job, CEO emphasized the importance of innovation in order to fill the empty gap (Wüstenhagen 2008).

He understood the benefits of helping customers get more jobs done with a single gadget. The need for convergence in the mobile phone industry led to the introduction of iPhone (Mohr & Sengupta 2009). Europe mobile market was saturated and thus people had to be convinced to buy phones. Convergence of a personal computer and mobile phone by the Apple Company gave it an advantage in the market. (Martin, 2004) Apple’s first entry into the mobile market was the Rokr, a mobile phone produced by Motorola which was compatible with iTunes, but was not successful when first launched by the maker due to its high cost in addition to being of few usage(Nutt & Wilson 2010). Moreover, waiting to enter the mobile market allowed Apple to observe the success and failures of other products (Mohr & Sengupta 2009). Observing the pitfalls of trying to fit pre-existing approaches to computing on a tiny device, Apple went back to the drawing board to design a good phone.

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Innovations

The iPhone exemplifies boundary innovation connecting together competences attributes and bridging several markets with a single product (Maxwell 2009). Apples fundamental success has been to look at itself not merely as a maker of personal computers but as a pioneer in cutting edge, consumer-friendly technology. Apple computer have a capability in the research and development function. People, work teams, equipment and financial resource are some of the resources that Apple integrates to complete various research and development tasks.

When Steve Job came back to the Apple Company as the CEO his plan was to regain the Apples stature in the market (Kuratko 2008). The first tactic job to implement his plan was to stop the market share bleeding by launching new products with flamboyant design and a new operating system. As far as his competitors knew, he was betting on the only strength Apple had left at the time, which was design and usability. These long-term hallmarks of Apples products were not the only weapon the company could muster. What the competitor could not see and what he set to work developing were the company’s creative resources in digital convergence. When apple started introducing products that offered holistic customer experiences based on synergy of software, hardware and the internet. Dell, HP, and other PC brands were outflanked. Their strategies did not prepare them to compete on Apples new playing field. (Nutt and Wilson, 2010) They also did not own the right software or they could not adapt their product lines to these new uses. So when his competitors were focused on defending their success in the personal computing market. Steve Jobs opened up a new line of attack by creating new and uncharted markets (Katz & Shepherd 2004).

The marketing strategy that was used for promoting the innovations was closely associated with the necessity to emphasize the innovative approach. Hence, iPhones, iPods, iMacs were positioned like well known things but with new functions, appearance and purposes. Hence, the idea of MP3 player is not innovative, however, the idea of purchasing songs apart from the entire album, while the price is low was innovative, and in some measure shocking for IP owners. Moreover, the design and controlling interface of iPods was innovative. Marketing strategy of iPods presupposed that everyone should know if you have iPod in your pocket or purse. Hence, earphones with white wire were invented. This became not only a revolution in media playing or listening to music: this was an innovation of taste, and the innovation of legislative approaches towards Intellectual Property principles.

The same is with iMacs and iPhones. The list of innovations may be endless; however, these innovations appeared to be the best promotion for the production by Apple that was headed by Steve Jobs for the second time.

The success of the innovations is obvious, however, it should be emphasized that innovations and creative approach did not end on the invention of new toys for gadget maniacs. One of the brightest examples was the integration of iPhone with other products by Apple, and the unification of the interface and control principles. Hence, iPhone was used as the platform for promoting other innovations, including iPad and iPods of newer generations. Promo videos were downloaded in newly sold iPhones; hence, owners had an opportunity to find out some information on the newly released products. Additionally, some software was installed on iPhones in demo version, while the fill version was available in iPods or iPads.

An innovation, which was not associated with technical performance of the company, is based on the banking system and the system of accounts, which were used for providing additional services to consumers. Hence, the company implemented the online banking system. First, consumers were surprised and wondered whether this system will be able to provide the full-fledged service, and whether it will be reliable. Hence, iPhone banking applications are associated with reliability and trust, as soma banks, like Bank of America prefer working with iPhone applications because of their popularity and reliability. Additionally, as it was stated by Funston and Wagner (2010, p. 319):

Retailers are also starting to get in on the iPhone action. The Gap and Target are two of the first retailers to launch their own iPhone apps that enable customers to buy products from their iPhones, and dot com companies like Amazon, let iPhone users buy from their cells. Just as shopping online was once considered innovative and rare, but is now a common activity that millions of consumers engage in every day, so the iPhone apps of retail giants will become increasingly common and “normal.”

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Was the innovation successful?

Apple has a culture of protecting its trademarks, intellectual property, and its copyrights that has made it to remain competitive in the market. Companies are forced to improve their innovation in order to stay competitive in the global market. Apple was able to create from the scratch a worldwide successful mobile phone (Hoskisson & Hitt 2008). The success of the iPhone is based on an attractive design, the concept of being permanently online and a new, and innovative user interface technology. The company’s approach was to integrate experienced partners with complementary core competences into a collaborative network. The aim of this collaboration was to design new innovative product by sharing and combining new previous isolated and distributed knowledge. Between June 29 2007 when the Apple iPhone first went on sale, to September 2008, Apple and its mobile service provider partners worldwide sold some 13 million units. From July 2008 to January 2009, the number of third party apps available for the iPhone went from zero to 15,000 applications downloaded 500 million times (Hine & Kapeleris 2006).

Apple has the opportunity to increase its market share by targeting other businesses and corporate consumers who need multipurpose computing solutions all wrapped in one. Additionally, Apple has the opportunity to increase its market share by targeting group of consumers who need entertainment. This can be done by getting the iPod users to upgrade their gadgets to a more multi-user iPhone. To effectively increase effectiveness of its marketing strategies, Apple would need to form more partnership with other established global mobile companies to ease distribution logistics and increasing market penetration at lower cost.

Nevertheless, in order to achieve the stated success, the company had to renovate its reputation. This could be achieved by offering innovations and non-standard approach towards promotion and product positioning. Hence, the sphere of computers was almost monopolized by Microsoft and PC structure, while the target audience did not accept the vertically integrated Apple computers with enthusiasm. Moreover, Apple did not have exit on European market, as Apple standards were not popular in Europe at all. The only way for the company to renovate its reputation was the necessity to offer something that people were waiting but no one could offer it to them. Thus, iPods appeared and started conquering media market. Some time was required for people realized that Apple has come back, and that it means quality and care for the consumers.

Team Responsible for Implementation of the Innovation

The company’s initial success during the early years resulted from technical innovation of Steve Wozniak. Apple demonstrated two key marketing related competences that were linked to Steve Jobs. The first strategy is product design. Steve Job always encouraged engineers to produce great products that were unique and different from any products marketed before (Funston & Wagner 2010). The other marketing competency was public relations. Apple creates excitement with products through launching events. Product launches are meant to create product awareness in the market and attract customers to buy (Funston & Wagner 2010). Several people were involved in innovation process of the Apple iPhone and. Steve Job headed the innovation team which was comprised of people form operation department, hardware engineering department and product marketing department. In January 2007, Steve Jobs of apple announced their entry into the mobile phone market with the iPhone.

In order for Apple Company to succeed in the market it adopted a good strategy in marketing and worked on product design and innovation. Moreover the company aims at nurturing a vibrant ecosystem and Steve Jobs had a great influence on the company’s success. Apple has created itself as a lifestyle company that specializes in hardware and software. Every move that Apple makes is informed primarily by how its products will integrate into the lives of the customers (Bilton & Cummings, 2010). It focuses on product lines that it feels matters most to a broad range of customers and leaves special applications to third party companies to service its products.

In general, the competition principles of Apple can not be regarded as aggressive, nevertheless, some problems for the competitors could be created, while some have been already mentioned. Thus, some companies aim to create something similar to iPhones with similar control interface and design, nevertheless, the original concept does not suit replicas. All the other problems are associated with the increasing sales volumes. iPhone positions itself as a reliable gadget, and it should be stated that the popularity of iPhones is constantly increasing, and this may be regarded as the largest problem for competitors.

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Statistics

As for the statistical data, it should be stated that the information is controversial enough. The company aims to attract investors; hence, the official data and experts’ estimations differ. Moreover, some experts are not able to reach consent even among themselves. In accordance with the official information (Richardson, 2010, p. 216):

The Company posted record revenue of $15.7 billion and net quarterly profit of $3.25 billion, or $3.51 per diluted share. These results compare to revenue of $9.73 billion and net quarterly profit of $1.83 billion, or $2.01 per diluted share, in the year-ago quarter. Gross margin was 39.1 percent compared to 40.9 percent in the year-ago quarter. International sales accounted for 52 percent of the quarter’s revenue.

In accordance with the experts’ estimation, the stock market performance of the company has increased for the recent year, and in comparison with the NASDAQ index, the company’s performance is rather successful.

Statistics

The market share of iPhones on the market of smart phones is represented on Figure 1. It is the product with independent OS; hence, it is regarded as a separate segment. However, considering the sales of phones in general, Nokia stays the leader of the market of cell phones. Nokia leads market share and sales volumes, while iPhones places the 6th and the 5th places respectively. (Figures 4 and 5). Considering the aspects of company revenues, up to 40% of these revenues are made by iPhone sales (Figure 3).

Conclusion

Apple seeks to change the way people behave versus just competing in the market place for traditional products (Bilton & Cummings 2010). By so doing, it has been able to establish first mover advantages through radical concepts using elegant designs and relatively perfect market timing to establish its advantages. Innovation process requires different competences, strategies, structures, cultures, and leadership skills. These changes are what drive performance. It was not by chance that Steve Jobs was successful at Apple until the market became more differentiated. This case study has described the innovation and entrepreneurship process in the Apple iPhone company, explaining how the company recognized the innovation opportunity, how the innovation was successful and the team that was involved in implementing innovation process.

Reference List

Bessant, J., & Tidd, J. (2007) Innovation and entrepreneurship. New York. John Wiley and Sons.

Bilton, C., & Cummings, S. (2010) Creative Strategy: Reconnecting Business and Innovation. New York. John Wiley and Sons.

Bilton, C., & Cummings, S. (2010) The boundaries of innovation and entrepreneurship: conceptual background and essays on selected theoretical and empirical aspects. Chicago. Gabler Verlag.

Funston, F., & Wagner, S. (2010) Surviving and Thriving in Uncertainty: Creating The Risk Intelligent Enterprise. New York. John Wiley and Sons.

Hine, D., & Kapeleris, J. (2006) Innovation and entrepreneurship in biotechnology, an international perspective: concepts, theories and cases. Chicago. Edward Elgar.

Hoskisson, R., & Hitt, M. (2008) Competing for Advantage. Chicago. Cengage Learning. Ireland, R., & Hoskisson, R. (2008) Understanding Business Strategy: Concepts and Cases. Chicago. Cengage Learning.

Katz, J., & Shepherd, D. (2004) Corporate entrepreneurship. London. Emerald Group Publishing.

Kuratko, D. (2008) Entrepreneurship: Theory, Process, and Practice. Chicago. Cengage

Martin, M. (2004) Managing innovation and entrepreneurship in technology-based firms. Chicago. Wiley-IEEE.

Maxwell, I. (2009) Managing Sustainable Innovation: The Driver for Global Growth. New York. John Wiley and Sons.

Mohr, J., & Sengupta, S. (2009) Marketing of High-Technology Products and Innovations. London. Jakki Mohr.

Nutt, P., & Wilson, D. (2010) Handbook of Decision Making. New York. John Wiley and Sons.

Richardson, A. (2010) Innovation X: Why a Company’s Toughest Problems Are Its Greatest Advantage. New York. John Wiley and Sons.

Terziovski, M., (2008) Energizing Management Through Innovation and Entrepreneurship: European Research and Practice. London. PublisherTaylor & Francis.

Trott, P. (2008) Innovation Management and New Product Development. Chicago. Financial Times Prentice Hall.

Wüstenhagen, R. (2008) Sustainable innovation and entrepreneurship. Chicago.Edward Elgar.

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