Analyzing Apple’s Strategic Leadership and Innovation

Last Updated: 02 Apr 2023
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As the first of the World’s Most Innovative Companies (Business week, 2010) and the 17th of the Best Global Brands (Interbrand, 2010), Apple has succeeded in strategic leadership and innovation, which has drawn attention from the world recently. This essay focuses on some key issues of Apple’s innovation. It begins with analyzing the key features of Apple Inc by Porter’s five forces and Kay’s distinctive capabilities.

Then, the evaluations of the CEO Steve Jobs as the strategic leader and explanations of Apple’s strategic innovation are involved. The final section is our recommendations to Apple. Features of Apple Industry: In the stage of analyzing the key features of Apple industry, the first method is the Porter’s five forces model. It divides into five parts, threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers and competitive rivalry within an industry (Assen, Berg and Pietersma,2009). Firstly, for Apple, there are some new entrants have disruptive power.

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For example, some online services which are similar to iTunes. However, there are numbers of high requirement for new entrants to get in the market, for instance, time and cost of entry. In the part of substitutes, nowadays, large amount of substitutes have good performance, they cost lower, are easy to switch, but only few of them have same quality as Apple’s products in the same price. In terms of bargaining power of buyers, it is an influential trouble for Apple. Although Apple has vast and loyal customers, every buyer and retailer all want better stuff in lower price.

Moreover, they may reduce spending on Apple’s products if their economy downturn. Furthermore, Apple can ignore bargaining power of its professional suppliers, such as Inter, and strategic alliance, like Microsoft. The last part is the existing rivalry; Apple has a lot of powerful competitors, for example, HP and Lenovo. They pressure into Apple in every technological area and attract buyers by different products. Nevertheless, to be the most innovation company of the world, Apple industry is competitive all the time.

Another method used in analysing key features of Apple industry is Kay's distinctive capabilities. This model consists of Architecture, Reputation and Innovation. Architecture: in the internal part between firm and employees, Apple industry has owns special corporate culture and a spiritual leadership. Apple corporate culture is featured in intense works and being pursuit of perfect works under a casual atmosphere and with sharing spirit. For a spiritual leadership, Steve Jobs' role in Apple is motivating employees to bring employees' creative talent into full play and not involving in the employees' work.

In the external part and net works of architecture, Apple only choose strong suppliers having professional advantages to cooperate, such as Intel, it always cooperate other firms with its own purpose. For instance, the apple chose the Google to take advantage of its maps and video features for phone. Reputation: Apple has a great reputation that is built up on the basis of the quality signals and consumers' own experiences. Apple pays attention to quality of products. Apple keeps a trial and error on every product to prevent any quality problems from happening in future.

Moreover, Apple's production is always based on consumers' experience. For example, Apple offers a free trial for consumers to feel their products. Innovation: Apple is famous for its innovation that can be demonstrated by technological innovation, product innovation and management innovation. Technological innovation means a perfect integration between hardware and software and Apple also keep updating them. Referring to product innovation, from first imac to recent-product i phone, Apple products, combining different functions, all go through the innovation.

Speaking of management innovation, after Steve job's employment, Apple's management style is successfully transformed from relaxed style to controlled one. Evaluation of Steve Jobs as a strategic leader Steve Jobs is known to be eccentric when it comes to strategy and business because he strives to become a market leader by dominating the competitors in customer loyalty, distribution and coverage, perceived value, price, profit and promotional spending. This is evident when we compare Apple and Microsoft because when Microsoft shows profit by sheer quantity, Apple competes strongly with the quality of its products and services.

As an innovative leader, Steve Jobs is legendary which is reflected on his company motto “Think different! ” Rethinking, reinventing and revitalizing are the three main ways of doing business according to Steve Jobs. Simplicity and innovation in terms of the product range gave Steve Jobs the edge over other competitors. A well-known example for this is the annual launch of new and updated versions of the iPod with a simple change in colour, form-factor and memory capacity. His risk-taking approach to business is believed to be unique making him an epitome of courage.

His idea of self-belief and a vision enabled him to lead a great career life. He believes in investing in new innovative products and services that are built on existing technologies to create a “customer and market-based business”. His ability to get over failures and try again makes him a suitable comparison with Thomas Edison who had his share of failures along with mighty successes. Apple is a multi-billion company and yet they have just fewer than 30 different products. This is because of Steve Jobs’ immense drive for focus on a specific and well-identified section of the consumer electronics market.

This shows the stringent and perseverant character of Steve Jobs as he would have told “No” to many potential ideas related both to the products and in recruitment. When Steve Jobs was fired from Apple in 1985 and came back in 1996, he implemented what we now believe as a CEO-centric model of strategic leadership that involves not just generation of ideas but also to hold the rudder of a massive ship that is Apple. Hence Steve Jobs will always be remembered as one of the most visionary, creative and high-impact leaders of his generation or any generation.

Strategic Innovation Apple has successfully engaged in strategic innovation and has awarded the most innovative firm for triple years continuously. At the same time, it is the top one most admired firm in American (McGregor, 2008). Due to apple’s history, it belongs to established company. Therefore, overcoming the inertia of success and making a change is a big challenge. Combing Palmer and Kaplan’s theory of seven dimensions of strategic innovation with apple’s experience, this paper analyzes strategic innovation in Apple.

In terms of Markides (1998), strategic innovation is basic principles build up new business modules and creates new markets and increase benefits for both company and consumer. In other words, strategic innovation refers to company needs to market positioning and was good at founding vacant space in market and filled up. Palmer and Kaplan’s theory of seven dimensions of strategic innovation are explained as follow: A Managed Innovation Process -Assembling conventional and unconventional ways to business strategy (Palmer, D. and Kaplan, S. , 2007).

It is said that apple’s products develop in simultaneous stages and Apple always sticks with a proprietary ecosystem. Though it has some drawbacks, the benefits outweigh drawbacks. Core Technologies and Competencies- Main skills (ibid). Due to the face that Apple is high-tech Company, it requires consecutive high technologies innovation. Apple was dedicated to study innovative industrial design; such as apple has the world’s most advanced operating system and intuitive UI and so on.

Industry Foresight –Forecasting the complex forces driving change (ibid. Steve Jobs quoted the words from Wayne Gretzky-“I skate to where the puck is going to be, not where it has been” (Jobs, 2008, cited in Yates, 2010). And he said they always tried to do that at Apple since the very beginning. Strategic Alignment – Establishing Support (ibid). In Apple, when it comes to a strong strategic vision for the business, the powerful leader is capable to align the people in the organization with the direction inherent in this vision. Therefore, the enthusiastic internal support could be achieved. Consumer/Customer Insight – Deep perceiving of target (ibid).

On one hand, Apple possesses wide audience ranging from amateurs to professionals. On the other hand, Apple satisfies customers’ requirements. All products are characterized by human interface design and ease of use, combing aesthetics and simplicity, showing a perfect balance of form and function. Organizational Readiness – The ability to implement strategy (ibid. ) The board of directors had been re-structured since Jobs took over in 1997. Apple gets an excellent leadership and team spirit. At the same time, Apple masters core technologies and competencies.

Sufficient preparation leads to success. Disciplined Implementation –Putting the strategy into effect (ibid. ) Apple’s process of implementation follows the module: culture- product-user-brand. All the products that meet user’s needs abide by their culture, which causes consumer loyalty; they get good reputation, therefore, the brand is established. Certainly, effective marketing strategy is an essential part of successful implementation. Recommendation Based on analysis above, here follows some recommendations to Apple. Maintain design spirit.

As most customers are attracted by peculiar aesthetic design of products, Apple should continue paying attention to it. Keep innovation. Innovation is the soul of Apple Inc, Keeping innovation will bring Apple a bright future. Improve product compatibility. Improving compatibility is able to increase the opportunities of choosing Apple products. At the same time, the product market share will be improved. Search for the promising leader and create positive crises. It is essential to find another brilliant leader after Jobs. Apple should keep unsatisfied with current success and pursue change.

Find hi-tech partners. Consumer electronics and entertainment industry are high competitive industries which update technology frequently. Thus, finding partner is crucial for an enterprise in the industry, especially, a hi-tech partner. Conclusion According to studied about Apple, it can be reached that there is an excellent management team in Apple Inc. , especially the CEO Steve Jobs, a strategic, spiritual leader with strong personality. In terms of strategy of the corporation, it is sticking to core competencies and innovation strategy, making the perfect products to consumer.

With reference to organization, Apple is a mix-mechanic and organic style. Staffs in Apple are always with passion and love their own company as well. Performance of Apple in the consumer electronic and entrainment market which is a hyper competition market with technology updating speedily is excellent. There are a large number of loyal customers, great strategies, beautiful products and influential leadership which are all produced by Apple, an innovation corporation. Reflection of our group work Our group work focuses on a topic- Strategic Leadership and Innovation at Apple Inc. y Apple case studies, several key questions are asked to answer, including the key features of Apple industry, the evaluations of the CEO Steve Jobs as the strategic leader, explanations of Apple’s strategic innovation and our recommendations to Apple. Our group activities was proceed according to a routine of making assignment for each people; then searching for materials individually; next, sharing ideas and of discussing issues together. In the following part, we will introduce a procedure of our group activity in detail.

The object of our first group meeting was getting main idea to carry out our project after we read the apple case material. In this meeting, our group discussed and got general ideas and several key words from this case: what is management and innovation in Apple. But it didn't work very well due to insufficient preparation. Therefore, when we made a second meeting, we changed our idea to go on our tasks according to orders of questions. Each two members of our group took responsible for one question, and a member took charge of introduction, recommendation and conclusion.

In this time, everyone got a clear task. In the following group meeting, we discussed what we found from collected materials and gave advices of every question and pick the best ones to the questions. Everyone is asked to complete their own speeches of their own presentation. If we had problems of our project in the period of not being together, we still kept in touch online. In the last two group meeting, we all gave a brief presentation of our own part to group members and made them understand every piece of our works, and we all achieved agreement to our project without any doubt.

One of team member combined all pieces of Power Point into the whole and decorated it. We all prepared for the presentation and kept practice with a time controlling together. For a group work, we evaluate that it is fairly good with advantages and disadvantages. On the one hand, we learned a lot from this group work. Firstly, we learned how to analyzer a case with models. Furthermore, we also learned that by a combination of case studies and models, it strengthens the knowledge we learned in the class. Secondly, this activity also improved our skills of doing presentation and reports.

We got a clear understanding of requirements of good presentation and reports. Last but not least, our team members shared ideas and made up for each others' disadvantages. From this experience we got the team work spirit and learn how to corporate with others, how to solve the conflicts. On the other hand, some problems existed in the period of meeting. Frankly speaking, some meetings are ineffective, because we didn't prepared well what supposed to do about case studies. Moreover, on the account of some member’s absence and lack of team spirit, the progress of our group work was affected.

Here are some suggestions to the future team work we learn from our experience: firstly, a clear schedule should be made in the beginning as a guide of future works. Secondly, team members need to improve group awareness and join in a group activity positively. Everyone of a group should review handouts or materials in advance of one’s own responsibility of a group. Lastly, the efficiency is critical to group work.


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