Apple's Innovation Strategy: How It Became A Market Leader In The Industry (Essay).

Introduction to Apple

Apple is an American multinational company specializing in online service, software, and consumer electronics. It is the most valuable company globally and the largest technology company. Apple was founded on 1 April 1976 by Steve Jobs, Ronald Wayne and Steve Wozniak (Podolny & Hansen, 2020). Apple incorporated designs, manufactured personal computers, tablets, smartphones, and accessories, and sold various services. Apple innovation is driven by major factors that include external competition and uncertainty. Apple is very efficient in gaining opportunities in the market and reorganizing its inefficient areas (Podolny & Hansen, 2020). Innovation plays a very important role in every organization in gaining many customers while grabbing a bigger market share. Apple uses radical and incremental innovation. It is considered a radical innovation (Podolny & Hansen, 2020). Apple, in design-making, produces beautiful and well-functioning products, which is achieved by development and innovation. Steve jobs focus on the quality of the product rather than quantity while shutting down new product lines to concentrate on main projects. Apple is an exponential organization in maintaining its functional structure and experiencing growth over the last years. This report sheds light on apple's innovation success by using proper strategy in the market and innovation strategy used by apple to become a market leader in the industry. At last, this report further talks about justifying apple as an exponential organization.

With continuous innovation, Apple is a market leader, and the company claimed 24.4 % of its share in the 2021 fourth quarter. Their main key to success is setting higher prices for building a luxury brand. Some strategies used by apple are: -

1) Constant innovation- Apple is the leader in the innovation process worldwide, with continuous innovation in the technological world (Johnson et al., 2012). Some examples are:  Touch ID, Apple is the first in the market to launch smartphones with finger sensors. It unlocks the phone by fingerprint recognition. With the advancement in technology, they have become more innovative in the market by launching face recognition unlock. Another one is Siri, this is the unique technique introduced by apple, in which people interact and get assistance from smartphones. It is the new way of interacting with smartphones, and it is a type of virtual assistance. Air pods is another example where the company once again surprised everyone by launching air pods in the market. This has several benefits, like, as it decreases the phone unlocking. Wireless headphones are a unique strategy, and they gain market goodwill in less time (Podolny & Hansen, 2020).

2- Adaptation of customer needs- Apple products are always linked with customer satisfaction. For example, Apple is the first to eliminate keyboards in smartphones, making apple customers acquire new innovative and exclusive products. This creates goodwill in the mind of the customers (Podolny & Hansen, 2020).

3-Design commitment- Design is one of the most distinguishing features of the brand (Podolny & Hansen, 2020). From an apple point of view, it is a very important point, and apple designs product that shows simplicity and that are highly functional.

Factors Driving Apple's Innovation

4-Quality before quantity- Apple's main priority was to provide high-quality products to their customers. That's why Apple has very few products in the market, but all products have unique characteristics that are polished to give the best results to the consumers (Podolny & Hansen, 2020). Apple customers hardly complain about typical issues like frequent pop-ups and app crashes because apple's programming and design are faultless. Every apple product is up to date with current technology in the market. Hundreds of experts test all products before launching and production.

5- Admirable customer service – One of apple's biggest strengths is providing excellent customer service to their customers. They take care of their customers by appreciating their customers in apple stores, where brands and users meet directly in solving their queries. Apple is a brand based on fulfilling the requirements of the needs of its customers (Johnson et al., 2012). This is the main reason behind apple's success in the last few years, and they are local for their customers. To keep their customers happy, they opened more than 460 retails worldwide and this aided to have a better communication and direct access from the customers (Johnson et al., 2012).

Improvement and branding- With every new product launched in the market, technological advancements are there than their previous model. This is why people stay hours in line when new model launches. Customers are excited with every new update, new camera feature, and new colour (Johnson et al., 2012).

Ahead of the competition- A brand is always ahead of its competitors. Apple obtained the policy of staying two years ahead of its competitors (Johnson et al., 2012). First, I phone was launched in 2007, and it wholly dominated the market before Samsung & Motorola came with their devices in 2009.  

Breaks the barrier of customer segments -Observation shows that the United States and similar countries carry a social class spectrum by carrying the same cell phone, iPhone. Apple is becoming a universal phenomenon; the way products are marketed. Apple's strategy of targeting customers is not restricted by demographic. They target their customers in every part of the world. Apple focuses on the feature that instantly affects the user, such as the display of the screen, storage space, camera resolution, and identification of fingerprint.

• Creating a culture in their brands- Apple is more devoted to its brands than any brand globally. Spawned brand culture has a long history of producing high-quality products built-in everyday life. Steve jobs donated nine thousand apple computers to California schools. Many people were crazy behind this campaign. The marketing strategy behind this role is considered a genius. Many customers are raised by using that computer in school. This creates goodwill in the mind of the customers, and these people won't use anything, no matter what.
• Never aggressive price wars- The assumption of many brands is that the price is just a part of the competition in the market. But the apple case was completely different. For years, apple stuck pricing models are always higher than its competitors. For example, the Apple mac book pro 13 is compared with the HP spectre 13. Both models have pros and cons, but MacBook Pro costs more than $800. Apple, instead of gaining customers with low prices (Johnson et al., 2012).

Apple is the number 1 innovative country in the world. The company's innovation strategy contains highly innovative business models and tremendous new products. Apple creates inches in new markets with new business spaces (Waidelich et al., 2018). Some game-changing innovations are iPhone, iPad, iTunes, and iPod. Apple hires great innovators for making the best thing in the world and hence, Apple uses cultural innovation.

 

Figure 1: First model of iPhone Apple 2007

Source: https://www.wired.com/story/guide-iphone/

1) Placing people first- Company's approach was to make lives better with intuitive and smart products (Waidelich et al., 2018). Continuous focus on making convenient and easier for people help apple in driving their innovation. For example, iPhones changed mobile phones forever, and many manufacturers now try to copy the seamless user interface of apple.

Apple's Innovation Strategies

2)  Hiring smart people, then empowering them- Empowering people in the company helps in employee engagement and motivation that contribute to best thinking.

3) Balancing flexibility and structure- Apple builds flexibility in their process, which helps discover new things.

4) Customers are jewels- even though Apple is an innovation giant in the current scenario; the company has not forgotten to focus on their customers. They read all feedback from their customers for shaping size and shapes (Waidelich et al., 2018).

 

Figure 2: Apple Park in Cupertino.

Source: https://www.cultofmac.com/529697/apple-corporate-address/

Steve Jobs Prioritized design thinking by applying: (Sánchez-Gordón et al., 2021).

1)- Designs a product that people have fallen in love with

2)- Apple is a status symbol- it has become a luxury status symbol for many people

3)- Over-engineering apple focus on design

4)- Product minimalism and simplicity over complexity.

5)- Need of the business over people’s needs.

For example, the iMac has excellent display quality, is designed well, is well sound, and is simple.

From 1997-to 2002, apple used think different advertising slogans. This slogan perfectly defines apple's approaches to design thinking.

Well-designed products through innovation- According to Steve jobs, it’s not how it looks but how the products work (Wu et al., 2020). Along with the product's functioning, apple mainly focuses on gorgeous products by development and innovation. Apple products always create a statement, and they are bold and trendy.

Brilliant innovation- Apple focuses on the quality of the product with new attractive designs in the market (Wu et al., 2020). They focus on their three main products while shutting down all products line. Apple products always have great execution.

Hiring the right people- Apple primarily focuses on hiring the right people, design teams, salespeople, and personalities that consumers can easily connect with. Apple made its product to be construed as a “luxurious thing” but also as an “exclusive feeling” (Wu et al., 2020). Apple products are more special when it is handed to the right people.

Product strategy- Product family products are organized in apple. Apple Air pods are connected with the iPhone connected to the Apple watch. It creates dependability of product and build-up as launching a new product.

Customer experience- Customer experience is everything in Apple that makes an unforgettable experience. Apple store's products design all are founded on design thinking principles (Wu et al., 2020)

Apple is the only company that has maintained its functional structure despite going through exponential growth for more than 20 years (Lima et al., 2019). Apple is considered an exponential organization because it is growing at an above-average rate, more than ten times faster than its competitors in the industry (Leavy, 2019).  

11 attributes of an exponential organization

Figure: 3  Source: lenspaper.medim.com

Strategy formation- Apple focus on generic strategy in wide differentiation. This strategy focuses on information technology products and features that differentiate the company from its competitors (Leavy, 2019). Apple has been managing its differentiated products through various innovations in the past few years, and this is the main factor behind its success over the past. The innovation of apple makes it different from other organizations, and it also creates barriers to the entry of new firms into the markets.

Game-changing Innovations by Apple

Focused execution and organizational alignment- Apple's organizational structure contributes to rapid and effective innovation, which is very important for business in online services, information technology, and electronics consumer industries (Leavy, 2019). A corporate or company organization structure is a mixture of resources, workforce groups, and integrated business resources in the apple structure of the corporate support strategies that push technological innovation in the industry. Apple's success is related to innovation and Steve Jobs' leadership, and the corporate structure of apple support this kind of leadership in the organization (Leavy, 2019). The corporate structure of apple includes three main characteristics; weak matrix functional, product-based divisions, wheel hierarchy, and spoke.

Improves processes and consistency-  Apple designs its product while optimizing energy usage, efficiency in its audits and supply chain efficiency when shipping its products to consumers. Apple maintains its consistency when products are built (Chu, 2019). It is tested very carefully and reviewed on a priority basis. This cycle continues from 4-to six weeks while reaching their final product development lifecycle (Johnson et al., 2012).

Improved prioritization- Apple prioritizes buying over usability because they create goodwill in the mind of the customers (Chu, 2019). This shows customer loyalty to their products, and Apple is selling an ecosystem, not a single product in the market.

Improved accountability- Apple commits to sustainable development growth plans to carbon neutrality in their products and supply chain by 2030. Apple has a proper roadmap for achieving this target (Chu, 2019). Their accountability runs on the concept of (DRIs) Directly responsive individuals. In this way, Apple is accountable for its hierarchy.

Improved leadership- Apple do not have any specific styles of leadership, Steve Jobs is known for being a perfectionist, and Tim Cook took over the role of CEO. It shows a visionary and autocratic approach (Chu, 2019).

Conclusion 

Apple has a very long development history, and it achieved its success through long-term growth. Various strategies were involved in the success of Apple company. The company has done innovations in their products from time to time to stay at the top of the market. Apple isn’t considering becoming first in the market. Apple innovation is always at the next level, company advance their products in such a way that users have a seamless experience using apple devices. Apple uses their design thinking as an important part of the product, and Apple is always above its competitors because they provide a seamless experience to the users. When Apple launched their new product in the market customers stand for hours in line to get their new iPhone. This shows apple has created goodwill in the minds of the customers,  Apple customers are awalys loyal to their brand. No matter what the price of the product, they are ready to pay huge amount. They take care of their customers by appreciating their customers in apple stores, where brands and users meet directly in solving their queries. Apple is the leader in the innovation process worldwide, with continuous innovation in the technological world. In this way apple is a market leader in their innovation and design thinking.

Journal Article

 Chu, K. K. V. (2019). Development of business shirt for man with apple body shape: the establishment of new design process model and evaluation of ergonomic ease. https://theses.lib.polyu.edu.hk/handle/200/9911 

Johnson, K., Li, Y., Phan, H., Singer, J., & Trinh, H. (2012). The Innovative Success that is Apple, Inc. https://mds.marshall.edu/etd/418/ 

Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), 955-961. https://5y1.org/download/d81b1593646c57c1c7561c9985253a2e.pdf 

Leavy, B. (2019). Leading innovation–resolving creativity’s paradoxes. Strategy & Leadership.

https://www.emerald.com/insight/content/doi/10.1108/SL-04-2019-0053/full/html 

Lima, F., Rainatto, G. C., & de Almeida Andrade, N. (2019). Exponential Organizations and Digital Transformation: Two Sides of The Same Coin. International Journal for Innovation Education and Research, 7(10), 385-404.

https://www.researchgate.net/profile/Giuliano-Rainatto/publication/337258229_Exponential_Organizations_and_Digital_Transformation_Two_Sides_of_The_Same_Coin/links/5dcd7e9392851c382f3dde79/Exponential-Organizations-and-Digital-Transformation-Two-Sides-of-The-Same-Coin.pdf 

Podolny, J. M., & Hansen, M. T. (2020). How Apple is organized for innovation. Harvard Business Review, 98(6), 86-95. https://empowerment.ee/wp-content/uploads/2021/03/How-Apple-Is-Organized-for-Innovation.pdf 

Podolny, J. M., & Hansen, M. T. (2020). How Apple is organized for innovation. Harvard Business Review, 98(6), 86-95. https://empowerment.ee/wp-content/uploads/2021/03/How-Apple-Is-Organized-for-Innovation.pdf 

Sánchez-Gordón, M., Mendoza-González, R., & Colomo-Palacios, R. (2021). Design Thinking in Practice. IT Professional, 23(4), 95-100. https://ieeexplore.ieee.org/abstract/document/9520234/ 

Waidelich, L., Richter, A., Kölmel, B., & Bulander, R. (2018). Design thinking process model review. In 2018 IEEE International Conference on Engineering, Technology and Innovation (ICE/ITMC) 1-9. https://ieeexplore.ieee.org/abstract/document/8436281/ 

Wu, R., Wang, C. L., & Hao, A. (2020). What makes a fan a fan? The connection between Steve Jobs and Apple fandom. In Handbook of research on the impact of fandom in society and consumerism. 378-396. IGI Global. https://www.igi-global.com/chapter/what-makes-a-fan-a-fan/237700