INTRODUCTION
Apple is contemplated as one of the world’s most recognised and significant brand when it comes to considering electronic devices, specially handheld items such as mobile phones and tablets. Apple is well-known for its products which are simple and easy to use be it a personal computer or a mobile phone. When it comes to the revolutionising of the technology market, Apple is notorious for its unconquerable niche and has created benchmark in the world of personal computers since its beginning. Steve Jobs and Steve Wozniak, who co-founded Apple, started with the simple idea of the personal computers however in 1997, after Steve Jobs returned to Apple, he started working on what shall be later introduced to the world as the iMac.
1997-2012 was a significant period for Apple which saw Steve Jobs working as the creative mind behind Apple’s success and the world received numerous Apple products like iMac, iPod, iPhone and in 2012 the iPad. Each item revolutionised the industry more than the other and shook the core belief of what consumer needs are and what an item should be. It broke many conventional beliefs around mobile phone and what the world received in the end can no longer be identified as just a phone.
In this report, comparison between 1997 and 2012 is drawn via situational analysis, both internal and external. That gives a clear picture of how far Apple has come, but also gives a clear picture of things that have changed. This will help not only determine how Apple has fared but also how they should proceed on the post-Jobs era for success.
SITUATIONAL ANALYSIS
SWOT ANALYSIS
A SWOT analysis is used for analysing the internal strength and weaknesses, and external opportunities and threats. Based on the understanding of these aspects, strategies can be identified analysing which can be realistically implemented. SWOT analysis for the year 1997 and 2012 has been performed on this report to gain perspective of the changes that apple has faced during the years and get a clear picture.
| STRENGTHS | WEAKNESSES |
| Apple’s successful acquisition of NeXTApple’s new operating system software NeXTSTEPApple supporting Microsoft OfficeBuilt to Order strategy | Lack of innovationUnable to retain and improve existing product due to lack of core technology and technical creativity – failure to upgrade existing Macintosh operating systemLoss of loyal customer baseLoss of market share.Financial instability – i.e. negative profit marginUncleared marketing position |
| OPPORTUNITIES | THREATS |
| Innovative products for PC marketIncreased partnership with competitors, i.e. MicrosoftTechnological development and concentration on creativity – hardware and softwareRealistic and efficient financial budgetingInvestment in R&D for better marketing positioning. | Extreme competition from other strong brands in PC market – Dell, HP, IntelHigh turnaround in technology development – both hardware and software – Microsoft being main competitor. Lack of investor and ready capitalHigh cost and low availability for product development |
Table 1: SWOT Analysis 1997
| STRENGTHS | WEAKNESSES |
| Leading innovator amongst the electronics brandsExcellent customer service that considered as “premium”Versatile and talented workforce comprised of creative group of directors.Simple to use product – which transpired as user friendly.Simple to use product also created loyal customer baseRise in market shareBrand name, good will and brand image | High price point – always has been a sore pointLack of options in different price range.Too much dependence on iPhone and introductory iPadLimited options with laptop hardware upgrade, i.e. no options to change or replace a battery, or memory.Limited software support for their laptops and desktops – creates opportunities for the competitors.Death of Steve JobsLeadership style and the balance in workforce |
| OPPORTUNITIES | THREATS |
| Launch of Apple TVOpportunity to introduce and emerge into enterprise market – i.e. US government sector by introducing the usefulness and user-friendliness of newly introduced iPadThe upgrade and introduction of newer models of phones and tablets and creating customer base and awareness (Phadermrod et al. 2019).Brand loyalty and loyal customer base.Making iCloud more user friendly and allowing it to synch between all connected Apple devicesEntry to large untapped base for smartphones in emerging nations and their carriers, i.e. China, India etc. | Death of Steve JobsThe lack of work-life balance in in Apple work cultureLoss of product appeal – upgrade didn’t necessarily offer a better productIntense product and price competition: Nokia, IBM, Blackberry, Samsung, Linux, DellProblems facing in global market. – i.e. China |
Table 2: SWOT Analysis 2012
PESTLE ANALYSIS
PESTLE analysis is one of the most popular tools to identify and understand the external influencer / factors for any product or strategy. The purpose of the external analysis is to review the external opportunities and threats to gain a better understanding of the market and environment, in which Apple operates. The external environment is defined by all factors outside of the control of Apple and the competitors within their operating category.
Political Factors:
As a significant amount of Apple’s sale are in the international market, global politics pays a very important role. Global terrorism played a huge role in influencing how Apple operates and maintains its business. As Apple also operate in Middle East, the strained relationship between the US government and the Middle East may also impact Apple negatively.
Apple also has manufacturers for a number of its parts and products from outside the US, like Czech Republic, Ireland, China, Korea and Cork. The bad political relations between US and the other world also have bad outcomes for the Apple. China’s political unrest also effects Apple negatively as they are heavily dependent on China for manufacturing of their goods.
Several suicide cases were registered against one of apple’s main Taiwanese supplier, Foxconn (Johnson, 2011). This was headlined as the “Nike moment” by one of the newspapers (Arthur, 2012) and due to the unexpected situation and the nature of it, Apple copped a lot of political pressure and had to revisit their policies and responsibilities. Apple was indirectly help responsible for the suicide of the workers which was due to less than ideal working hours and had to take responsibility and implement changes in the work environment (Hunt, 2012).
Economic Factor
In 2012, Apple felt the impact of the economic crisis in Europe (Lunden, 2012). It has resulted in decrease in its revenues by 16%, during the third quarter of 2012, compared to its revenue in the same period the year before (Lunden, 2012).
In 2011, US observed a higher inflation rate compared to the year before. As the company reserved a high volume of cash (annual report, 2011, 2012), that was affected by the rise and then the consecutive drop in the inflation rate. The inflation rate in 2011 went to a massive 3%, doubling from 1.5% in 2010, and then dropping to almost half of that to a 1.7% in 2012.
Two of China’s leading cities have discussed the raising of their minimum wages in 2012 (Tsui and Rabinovitch, 2012). It’s a widely known fact that China is one of the biggest manufacturers of most of Apple products and parts and this rise in labour cost will lead to a rise in overhead cost. The southern city of Shenzhen, where the minimum wage has also been on the higher side, historically, is said to be considering a raise of almost 16% per month, whereas Beijing has raised its wage by 8.6%. It is said that the economic plan for Chinese government is to raise the minimum wage by 13% per annum, which is their 5-year plan between 2011-2015, which have already affected Apple, and will continue to do so in the near future.
Another factor that plays important factor is the change in exchange rates. Any change in US dollar value will affect Apple and it’s share prices as well the price of its products. Apple’s key market overseas is in Europe and China, however any difference in currency due to the change in exchange rate, will affect the production cost and as a result will affect the unit price in these countries.
Social Factor
Globalisation is a huge factor in todays business that plays a major role, specifically in a company like Apple who runs business worldwide. Due to globalisation, various social factors are also key players in the rise of Apple and its popularity and its embedding itself in the consumer’s everyday lifestyle.
As discussed earlier, Apple’s high price has always been a constant and the price is also one of the factors which helps Apple define itself as a premium brand in its technological world. However, as a result, the price also becomes the reason why it may or may not be popular among a certain class of people in different countries and region. While it is desirable not only because of its uniqueness but also the simplicity of the products, the product indeed sits on the price point of a luxury item for many due to its exceedingly high price making it only affordable to the higher financial classes of the society, making it more of a status symbol than an useful gadget that it is.
Apple has also so far not made any substantial breakthrough with their market in Africa (Bradshaw, 2012). While Apple has managed to acquire a substantial market share in many parts of the world, it hasn’t gained popularity in Africa, where the brand doesn’t have vast recognition to begin with. Approaching the new market may create an array of opportunity for Apple.
Technological Factor
The technological factors basically have posed good numbers of scopes and opportunities for Apple to sustain in the competitive marketplace while at the same time, acquire more customers and increase the revenue generation capability too. To be precise, the growth of cloud computing has increased the scopes and opportunities to meet the increased demands in the marketplace for Apple while the technological integration in business functions and processes has also helped in sustenance in the growing mobile market much more conveniently. It has also helped the business organisation to redefine the corporate structure as well as offer cloud computing services to maximise the profitability of the business to a large extent. With the introduction of Apple App Store and other digital content distribution platforms, it has become easier and convenient for the business to penetrate new market segments and achieve the corporate vision and mission statement with much ease and effectiveness. There are multiple competitors of Apple such as Google, Samsung, which have always tried to replicate the products and services offered by Apple and thus the company has aimed at bringing something unique by introducing the premium smart phones in the market so as to cope up with the immense demands in the market (Apple.com 2020). Though these are considered as very much benefits of technological integration across the business functions and processes, the advent of technology and its diffusion could often lead to reduction of market share and increase of cost of smart phones, which might get out of reach for many customers as well as fail to compete with other brands that offer similar kinds of premium products at a comparatively lesser price range (Shtal et al. 2018).
Legal factors
The increasing privacy regulations have created both opportunities as well as threats for the business organisation while the legal challenges against the policies and practices of the organisation also created some major threats. The Government has put pressure on the privacy management in the digital age while the legal external factor has also imposed regulatory compliance requirements that are costly and have certain limitations on the technology based organisation. The legal factors also sometimes could present good opportunities or the business to enhance its privacy measures and overcome the legal battles that brought criticism on the organisation. On the other hand, the products being covered by intellectual property laws might make the company vulnerable or subject to harms related to litigation and piracy issues too (Jimenez-Jimenez, Martínez-Costa and Rodriguez 2019).
Environmental factors
One of the major environmental issue is the disposal of used as well as non-functional electronic devices and the lithium batteries also get disposed, which could result in concerns related to landfills. The manufacturing facilities are growing concerns as well due to the pollution caused and also the increased regulations for protecting the environment and higher costs of manufacturing and production processes. He business organisation has actively involved in cutting down the emissions of greenhouse gases to a certain extent and at the same time, limit the use of fossil fuels, though it could result in increased electricity consumption and other side effects too. The business sustainability trends are considered as major environmental trends that have allowed the business to adopt sustainable practices and mitigate the adverse ecological impacts while at the same time, enhance the corporate image of the company (Wright et al. 2019). It also possesses more scopes and opportunities to adopt new and energy efficient technologies and at the same time, adjust the operations and technological products according to the ecological trends, at present.
Risk analysis
Identification and analysis of risks
The risk analysis for Apple has been done to emphasize on the risks and issues associated at the development of new technologies, new markets and business models that change the entire world. It is based on how the radical innovation would be made and focus should be more on the new technologies, markets and business models and not on the existing products and systems.
The major risks analysed, as per the W and T of the SWOT analysis framework include the focus on the premium market segments, as a result of which, the price point is always high while there has always been lack of options for the different price range, at which, the products should have been available (Aven 2019). The company has been mostly reliant on iPhone and iPad while the options of the hardware components of the laptop are also limited. The limited software support for the laptops and desktop computer systems of Apple and poor style of leadership, after the demise of Steve Jobs further led to certain risks experienced by the company while trying to deliver something new (Helmold 2019).
The work life culture has been affected the most, as there is little or no work life balance among the staffs, which has resulted in a poor corporate culture while the upgraded products does not come always with something exemplary, considering the price point. The competition is very high and with Android grabbing a good amount of market share, the iOS system lacks certain features at that high price point even. The company has also experienced issues and problems in the global market of China.
Mitigation approaches to overcome the weaknesses and threats
To mitigate these risks and threats, Apple has launched a new range of Apple Smart Television to target a specific segment of buyers while it has also helped in grabbing the opportunity to influence the Government sector about the benefits such as user friendliness and reliability of using the new iPad. Not only does this approach acts as a great radical innovation technique, but also the upgrade of new products and introducing new product models created better awareness among the customers. It has established a loyal base of customers and at the same time, enabled iCloud feature available for the users to sync between every connected devices by Apple. It is a great way to offer something new, unique and differentiable from the competitors, which raises the potential of Apple to make an entry into nations such as India and China more prominently than now (Hubbard 2020). The technological trends have created opportunities for Apple to respond to the market demands by introducing the cloud computing services that have kept customers satisfied as well. The investment of more money in the R&D activities has enabled Apple to sustain advantages and deliver better customer experience with connecting with different products and enable sync with the help of a software which offers better security features too. These are very much difficult to get imitated, thus, allows the company to manage differentiation and ensure attraction of new customers and retention of existing ones quite comprehensively (Muralidharan and Pathak 2020). To succeed in China, Apple could redesign certain products that could be suitable for the market with the inclusion of lifestyle features and fashion that integrate with the culture, along with offering at lower prices. With more established customer honesty and loyalty, it is very much meaningful for the business to overcome the risks and threats, thus become successful while developing for the future. These mitigation measures often form the base of radical innovation, which is responsible for managing disruptive changes and ensure entering global market with ease and effectiveness (Klinke and Renn 2019).
Assumptions/Limitations
The main limitation faced during preparing this report is the accessing the information. As the report has discussed the position of Apple between 1997-2012, while available in financial reports, related information were very hard to access in any other platform for 1997. The information available in financial reports of Apple can never give a complete picture as they are only data and any context presented would be presented from the company’s point of view.
The second limitation was the use of the case study as one of the literature reviews. While informative, the case study was not free from bias and it was a very apparent pro-Jobs piece. It wasn’t possible to arrange for further interviews with current board members and creative heads and observe the inner workings to draw comparison to get a clearer understanding of Apple’s present state.
The limitations also include not being able to carry out interview sessions with the staffs or employees of the organisation, which might have led to greater insight an acquisition of information to justify the balance on the leadership style used by Steve Jobs. In some cases, the annual reports though were available, still the financial data and information had been somewhat difficult to access and understand, which also created some major limitations considering the case study for Apple.
The assumptions that have been made include the extensive research and development activities undertaken by the organisation Apple include the culture, strategy and leadership managed at the organisation. Not only does the strategic moves allowed the company to create a good sense of market timing, but also the commitment towards understanding the customers well in terms of computing devices usage has helped in increasing the desire to introduce great quality products. It has been aimed at matching the needs of customers and ensure fulfilment of demands and expectations of millions of customers all around the globe with ease and efficiency (Meissner 2019). The assumptions also include creating a marketing excellence and higher expectations among the followers, which has been possible with the help of managing a streamlined product portfolio while at the same time, manage reuse with the product families through development and implementation of a platform based strategy. The platform bases strategies have redefined the product concept and planning while at the same time, designed the initial products as a platform with assumptions of accommodating with the development and production of these products for catering the needs of customers effectively. With the effective use of this platform strategy, the organisation’s assumptions also include creating a more stable and reliable product design for the mean products developed, which should require lesser maintenance, lesser costs of repairing, servicing, basically for the first time buyers of Apple products. With the management of some similarities among the design elements and the user interface of the products, there would be more customers, who would require lesser training or knowledge to make the product function properly (Hollensen 2019). The assumptions, as per information also represented the fact that leaders have allowed the company to carry out the 4 th and 5th generation R&D and at the same time, introduce open platforms, promote collaboration, manage third party developers, finally, bring a community design and ensure transparency largely.
Hypothesis
Considering the leadership of Steve Jobs, the radical innovation has been quite successful and design thinking played a vital role in adding value and benefits to it
Sub-hypothesis
With the exemplary leadership skills of Steve Jobs, the innovation managed at Apple has been largely driven by its culture, design thinking and commitment towards introducing ‘new to the world’ products and services
Evidence/proof of hypothesis
The evidences that are relevant to the hypothesis represent the fact that the emerging technologies have been transferred to the market place, which has been supported by radical innovation process. It has prioritised on the formation of a healthy work culture while at the same time, enabled design thinking concepts. The design thinking concepts enabled Apple to come up with a computer system that supports and facilitates individual work roles, which has made the customers feel interested about the products and understand how they could be benefited by that. Under Steve Jobs guidance, the company has addressed the users and made them believe about the usefulness of the product and even managed simplicity in design and usage. The design sensibility of Steve Jobs has massively helped in putting concerns on the smallest details of the product, even the packaging of the product.
The framework for Strategic Innovation by Kaplan and Palmer has helped the company a lot in bringing innovation with the introduction of the iPhone and the iPad, which have been immensely successful. The strategic alignment of the model represents the enthusiasm that Apple has managed to create among the customers, which also established support between the key stakeholders for stimulating the organisation and remain focused on the shared vision, mission and goals of the organisation. The foresight of the mobile market allowed the company to manage change and identified the trends by thinking out of the box (Palmer and Kaplan 2007). Moreover, the understanding of the customers’ needs and their demands for something premium and unique, finally made Steve Jobs bring the smart phone that overshadowed the other consumer electronics businesses largely. It was the biggest technology of the year and most importantly, Steve Jobs merely focused on advertising the product prior to its launch, which was a definite secrecy that Jobs had always been obsessive about. Now, with every passing years, the company has been coming up with something new, which consist of the core technologies that are needed to deliver customer satisfaction and increased he readiness of people to as well as the organisation to go forward to the innovative idea effectively (Isaacson 2012).
Evaluation of evidence- pros and cons
The evidences are acquired as per the hypothesis has been set, which represent the leadership skills and capabilities of Steve Jobs that have helped in the management of radical innovation and making the design thinking concepts play a major role in the addition of value and benefits to it.
Pros
Acquiring the emerging technologies by Apple for radical innovation reflects the initiatives of new product development for market development. Training the staffs on effective and judicious operations of the technologies supports the creation of a healthy workplace culture. In this context, Schiele and Chen (2018) states that the concept of design thinking can be critically evaluated with the help of Design Thinking Double Diamond Model.
Computerized systems, facilitating the individual work roles conglomerates the stages of discover, define, develop and deliver, as in the Design Thinking Double Diamond Model. It is the planning, which ties the diamonds of the model. Delving deeper into the business concept, planning assists Apple in assessing the feasibility and suitability of the decisions in regards to the specific demands, needs and requirements, that is, iPad, iPods, MacBooks among others. Customer segmentation and development customer personas relates to strive against evaluation for the best possible ways in which the customers can be served.
According to Fowlie and Forder (2019), the leadership of Steve Jobs is the basic aspect, which assists Apple in enhancing the uniqueness within the business. Design sensibility of Steve Jobs can be considered as one of the basic traits, enhancing the leadership skills, abilities and competencies. In this context, Trait Theory of leadership can be applied. Therefore, it can be inferred from this aspects, that the main hypothesis is established. His charismatic style of making the employees work together and drive motivation among them has been a major advantage of his leadership skills. Steve Jobs has formed a great work culture within the organization, which has also led to driving everyone in the team to create products that are far better than what was expected.
The sub-hypothesis specifies the leadership skills of Steve Jobs on the basis of design thinking, innovation management, and commitment among others. According to the product life cycle, the emerging technologies place the products of Apple like iPad, iPods, MacBooks on the maturity stage, which stabilizes the market position. According to the Design Thinking Double Diamond Model, discover relates to the strategic planning of Steve Jobs for addressing the specific needs, demands and requirements of the customers. In this context, Wright et al. (2019) is of the view that radical innovation is the developmental aspect, which delivers high product value yielding value for money from the customers. Emphasis on placing the smallest details in the product with perfection relates to the imitability and value of the VRIO analysis, which assists Apple in achieving higher competitive advantage. Herein the sub hypothesis is also proofed and established.
Cons
Lack of evaluation for the proposed innovation in the planned designs makes the market position somewhat vulnerable for Apple. This is because of the contemporary brands, which conduct market research for assessing the feasibility of the innovation, aligning to the customers’ needs. This drawback attaches an interrogative parameter to the main hypothesis, which consists of Steve Jobs’ leadership regarding the innovation management. Not considering the analytical tools like value chain analysis, VRIO analysis, design thinking model, product lifecycle is also a challenge for managing the innovations for enhancing the product offering (Lin et al. 2019). In this context, the strategic alignment concept in the strategic innovation framework by Kaplan and Palmer is somewhat distorted, affirming the need of modification for the design thinking. Though the leadership style of Jobs has been exemplary, the argumentative behaviors and persistent negativity often resulted in forcing the team members to despise him, which might not be favorable for creating a productive work environment (Garver 2019). The over expectations often led to many employees not agree to what he said, which might be a major issue or problem for hindering radical innovation and management of design thinking concepts.
Recommendations and actions
The recommendations and actions are basically undertaken to ensure that Apple successful manages to integrate the design thinking concepts and ensure radical innovation for sustaining a good place in the competitive marketplace. Considering the present year 2012, it is recommended for Apple to focus on the platform based strategy so as to bring innovation and ensure envisioning a family of products during the early stages of product concept and planning. The initial product has been designed as the platform, which has accommodate the development and production of the products that have been envisioned and at the same time, could offer a great deal of advantages for the organisation as well as its suppliers and customers.
The recommendations have been set as per the SMART approach, which are as follows.
Recommendations for Apple
Specific (S) – The organisation should facilitate radical innovation and use the platform strategy to sell the iPhone and iPod from the Apple Stores effectively.
Measurable (M) – Apple should aim at creating the next iPhone and even introduce some range of products through innovation within the upcoming six month.
Attainable (A) – To increase the numbers of customers and retain existing clients by 10 percent within the next year with the help of iterative customer involvement technique
Relevant (R) – The Company should aim at expanding to China and India and introduce new range of stores as soon as possible.
Time bound (T) – To increase the revenue generation capability and ensure management of radical innovation to ensure consistency in business within the next 2 years
Based on the Deliver phase of the Double diamond model, what could work for the company is the Iterative customer involvement, which is recommended for the business organisation name Apple to ensure that the customers’ experiences are properly integrated into the processes of design, manufacturing, development and production. It would help in truing different things and do things the right way as well, thus, drive new prospects that are crucial for the innovation management and design thinking concepts too (Rugman and D’cruz 1993).
Apple is also recommended to change the colour of the product from pristine white to new and attractive colours that act as good motivating or driving force behind radical innovation concepts and management of design thinking as well. The deliver phase of the Double Diamond model ensures that changing the colour of the product and enhancing its attractiveness should serve the passion of customers and pay close attention to the new materials and processes of manufacturing and production too.
Besides all this, the company must also focus on the management by allowing the employees to share their individual thoughts, ideas, opinions and feedbacks to improve the process of decision making. This is crucial for hands on involvement in the decision making process, while it could also ensure establishment of a good culture and healthy workforce conditions for people to work in at Apple (Kreutzer 2019).
Recommendations for other companies based on ‘best practices’ at Apple
- It is recommended for other companies to rethink the need for advertising and promotions
- It is also recommended to prevent price wars, rather focus on the unique value proposition and ensure delivering values and benefits
- It is also essential for the other companies to keep the products simple as well as the marketing, which could stress the benefits and value that the customers actually require
- Designing a better customer experience is also recommended through proper marketing activities and management of budget for the same
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