Creative Creativity- Incremental and Radical Innovations in Apple Inc
The case study provides a brief description that captures Apple Inc.’s growth. The company’s performance and significance in the market are forces to reckon with. Apple offers a variety of information technology products that range from phones, MP3 music players, iPods, computers, and even songs. The company’s products are reliant on incremental innovations, which are clearly defined and understood and have lower profit margins. Radical innovations also constitute Apple’s products. These innovations are risky but offer access to new markets. Apple has been growing steadily as the company puts out more products in the market. Currently, it is renowned as the most prominent IT company globally (Dawson & Andriopoulos, 2017).
Questions and Answers
Reflect on whether the 2016 decline in market share price is a one-off or more serious issue, and consider whether it is possible to identify any future threats or challenges that should be addressed.
The 2016 decline is a graver issue that may have occurred due to high prices and reduced investment in destructive technologies. Since Tim Cook took over the company, it has gravitated more towards continuing technology, which increases the competition it encounters in the market. Destructive technologies were more common during the Steve Jobs era. They yielded higher margins due to the low cost of investment. However, the risk was high. Regardless, this provided a first-mover advantage to the organization (Liu, 2021). This decline points to competition as a threat and complacency in innovation within the entity. It is essential to address these to avoid additional declines in the future.
Apple is well-positioned, well-resourced and a financial giant, but it also needs to build on strengths and opportunities. Which strategic direction would you recommend and why?
I would recommend that Apple reconsiders its management of human resources. Employees form a significant aspect of an organization. Apple can barely lead the IT market without employees. It is known for high secrecy. However, this aspect affects the employees who are not allowed to raise issues regarding work safety or remuneration freely. Retaliatory management styles are common at Apple. These elements have attracted the attention of respective agencies, such as the National Labor Relations Board, due to complaints by employees (Turner, 2021). Therefore, Apple should work on increasing transparency in the organization, which should enhance the trust that employees have in management.
If incremental and radical innovations are both critical, what percentage of resources should be allocated to developing each of these avenues, and how can you successfully manage and adjust strategies and plans for a future that is as yet unknown?
Both innovations are essential for the company’s sustained growth. Radical innovations should get a higher percentage of resources because they provide greater benefits than incremental innovations. Furthermore, the comparison when building products using radical innovations is significantly reduced in comparison to incremental innovations. This allows Apple to make significant revenues before the competitors adopt such innovations. Most importantly, they eliminate the innovation dilemma, which may occur due to a lack of new products (Liu, 2021). Such resource allocation provides significant sustainability for the entity in the future.
Innovation is one of the critical aspects that is clearly identified in the case study. Apple was built on innovation from the beginning. Incremental and radical innovations provide the company with the ability to create new products that solve current problems. Apple is renowned for its ability to innovate. This aspect sets Apple apart from the rest in the market because of the products it offers. Its products are targeted at the more affluent in society who like to be different. This explains the premium prices. To continuously satisfy this demand, innovation is critical for the entity.
Innovation yields product development. Apple’s product development is elaborate and undergoes intense reviews. Apple must produce new products based on radical innovations to remain relevant in the market. The radical innovations are risky but offer greater benefits in terms of margins and new markets. The introduction of new products in the market is only sustainable if the company continuously innovates.
Apple’s history and recent performance came in handy to identify the critical aspects. For instance, Apple is built on a foundation of innovation. In IT, the advancements are rapid. This means that players such as Apple must be alert to these innovative technologies. They are responsible for making sure that technological advancements are incorporated into the new products. Failure to do this reduces the company’s relevance in the market. As a company that has a significant position in the global market, innovation is inevitable. In addition, the company’s previous CEO, Steve Jobs, built the company on constant innovation. Destructive technology was more prominent during his leadership, leading to a high number of patents. Exploring this technology allowed the company to enjoy a first-mover advantage, an aspect that is critical to its success (Liu, 2021).
Product development cannot be separated from innovation. The company uses IT to create other products that are reliant on advancements for functionality. Therefore, innovation by itself cannot sustain Apple. It must convert these advancements into products and services that are beneficial to its markets. This means that Apple uses technology to enhance the functionality of the gadgets it produces (Dawson & Andriopoulos, 2017). Elaborate product development allows the company to create products that are valuable to the target market.
The case study highlights various aspects that can be utilized as solutions. First, consistent improvement of products is a critical aspect that all organizations should adopt. When an organization consistently improves its offerings, it retains its market share and elicits loyalty among the clientele. Apple’s ability to constantly improve its products explains the consistent success and retention of market share.
Secondly, the need for constant innovation is essential for the maintenance of a leading position. Competition in the IT market is stiff. This means that Apple must offer additional aspects to its products to charge premium prices. This is achieved through innovation. Failure to innovate could stagnate the organization, making it difficult to make profits. Innovation precedes product development. The constant development of products that incorporate various innovative technologies allows an entity to face stiff competition and emerge as a leader.
Thirdly, radical innovations provide an avenue for IT entities that intend to occupy the lead position in a sector. The radical innovations carry greater risk but offer increased benefits due to the reduced competition. They also place the entity in a better position when compared to competitors. Organizations such as Apple can use these innovations to propel growth and increase its margins. Creating products from these radical innovations makes it easy to appeal to the broader market. Organizations that constantly innovate remain relevant because they provide practical solutions that are needed in the market. Such organizations relate more with the chosen target markets. Therefore, entities that find themselves stuck should explore innovation. The outcomes from this approach include loyal clientele, increased revenue, and attainment of the leading position in the market.
The case study is a critical learning point for all readers. As observed, Apple is undoubtedly a leading company in the IT sector. Every organization goes through highs and lows. The financial highs can be attributed to constant innovations that lead to incremental improvements of products. The lows can be attributed to reduced innovation, high prices, and economic shifts. The company’s ability to maneuver these external threats and turn internal weaknesses into opportunities is critical for survival. Entities that fail to conduct an environmental survey may not realize these issues, creating long-term losses. In the worst-case scenario, the companies could lose their market share.
Leadership is an essential aspect of every organization’s success. The leaders of an entity set the precedence, which other staff members follow. If the leadership exhibits complacency, the company stands to lose because followers are not driven or motivated. This affects the organizations’ ability to move forward and deal with competitors.
Besides leadership, employee relations are critical to the success of an entity. The workforce is the heart of every organization. Therefore, the treatment that employees receive determines their satisfaction and commitment to the job. The human resource department is tasked with the responsibility to ensure that the employees are happy. Creating an environment that enables the exploitation of talent, acquisition of skills, engagement, and involvement is essential. Every entity that commits resources to such causes creates a formidable workforce, which is an inimitable competitive advantage.
Finally, competition in the IT sector is stiff and demands that an organization remain alert. IT products have a short life span due to constant advancements. An entity that fails to keep up with these innovations is set to diminish completely. This explains why Apple built its foundation on constant improvements and innovations.
Dawson, P., & Andriopoulos, C. (2017). Managing Change, Creativity & Innovation. Sage.
Liu, Z. (2021). Analysis of Apple Inc.’s Innovation Dilemma From the Perspective of Leadership. Proceedings of the 6th Annual International Conference on Social Science and Contemporary Humanity Development (SSCHD 2020), 517, pp. 551-554. doi:10.2991/assehr.k.210121.112
Turner, N. (2021). Apple Worker Complaints Reviewed by Labor Relations Board. Bloomberg.
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Carefully READ the entire CASE first, and review the chapter(s) pertaining to the case(s) again. Take time to think critically about all of the aspects of the case(s).
Write a brief Overview/Summary of the case in your own words, describing the nature and/or background information pertaining to the case. (Minimum 1/2 -1 page)
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