Strategic Innovation Management And Critical Success Factors Of Apple, Essay.

1. Innovation Management - Critical Analysis of the Business Case
• Concise summary of innovation management process
• Critical analysis of the Innovation Management process: from opportunity identification, and concept generation through to concept testing/evaluation and business modelling
• Clear identification of the challenges within the Innovation Management process
• Clear identification of the critical success factors within the Innovation Management process

2. Use of relevant business case material and market data 
• Strategic relevance of data collection and analysis techniques
• Depth of interpretation and evaluation of data
• Quality and completeness of referencing of any secondary sources
 

The report highlights on the significance of strategic innovation management within the business. The enterprise that is chosen for this report is Apple Inc. Apple Inc is one of the biggest multinational corporation headquartered in California. It designs, produces and sells computer software, consumer electronics and other online services. The hardware products that they sells includes- iphone, ipad, ipod, smartwatch, TV etc. The software products includes- iOS, macOS, iTunes, etc. This enterprise has been considered as the world’s biggest information technology in terms of revenue and second biggest phone producer in the  year 2015. It has attained huge reputation in market due to its innovative products.

Innovation is vital for the survival of the business in highly competitive business environment where it is difficult for differentiating products as well as services. Innovation is usually applied to the enterprise in various ways that involves- Product or service innovation, process innovation, business model innovation, marketing innovation, financial innovation, supply chain innovation and enterprise innovation (Davila, Epstein and Shelton 2012). Innovation management signifies the procedure of managing innovation procedure of the enterprise that begins at initial phase of ideation to the final phase of effective adoption. It mainly encompasses strategic decisions, activities and various practices of planning as well as adopting the innovation strategy (Goffin and Mitchell 2016).. Moreover, the managers of the organizations administer innovation through different stages of innovation cycle. The innovation cycle indicates the activities that are involved in moving innovative service or product to the market (Dodgson, Gann and Phillips 2013). There are two basic activities of this innovation cycle that includes- development of innovative goods or service and expanding business for marketing commodity or service. Innovation enterprises typically work on new innovations in order to eventually replace the older products. The report also highlights on the significance of the innovation management in this firm. The study reflects on the innovation analysis of one product of Apple i-pod. Furthermore, the business model innovation of this Apple i-pod is also discussed in this report. In the last section, the critical success factors that have lead to the market success of this product is also explained in this report.

Strategic innovation management refers to innovative practices including competition mechanisms analysis such as creation of innovative vision, harmonizing strategy in business, expansion of strategy to the levels of organization, market tendencies and acts of competitors. It has been opined by Hitt, Ireland and Hoskisson (2012) that, success of innovation mainly depends on the owned resources and the firm’s ability to manage the resources. Some of the vital determinants of the strategic innovation practices involves- organizational structure, technological capability, innovation strategy, innovation culture and relationship between the customers and suppliers. It has been found out by some researchers that effective strategic innovation management practices influences the innovation performance of the organization.  

Importance of Innovation Management

Strategic innovation management plays a vital role in the performance of the organization. This is because it facilitates in –

• Stimulating innovation- It motivates the workers to innovate products and services by allocating rewarding effort as well as time. However, the managers of the enterprise plays dual role in supporting as well as stimulating innovation.
• Realigning the enterprise- Innovative idea for producing new product might require important change in enterprise for bringing it in the competitive market. However, the enterprise might need new suppliers for providing vital components for new products. This in turn might lead to opening of new channels to the market for reaching target customers.
• Providing resources-Managers supports innovation as well as maintain momentum by giving resources in form of money, people and time. According to (), the leaders of the company supports their innovators by recognizing the individuals who can bing balanced perspective to project.
• Commercializing the commodity-An innovative commodity might not attain success without proper management.  The enterprise should commit their marketing resources to commercialize innovative product. Moreover new goods and services requires marketing for building relationships with different kinds of customers.

Apple Inc is one of the valuable organizations around the globe and has maintained huge dominance for reputation as innovative enterprise. Owing to their innovative products as well as brand reputation, this company has attained huge success in the competitive business environment (Aaker 2012). In addition to this, its innovative design is also considered as one of the factors that lead to its huge success in business.  In fact, Apple’s innovation management facilitates this enterprise to gain competitive advantage over its competitors.

The leaders of this company helps to generate innovative ideas, manage innovation and effectively integrate this innovation for manufacturing products. Moreover, the leaders of this organization generate innovative idea by carrying out research and development. In fact, this enterprise has an innovative factory where the leaders carry out different kinds of experiments by using talented and skilled individuals. It has been opined by Vermesan and Friess (2014) that, innovation in this company is mainly driven by competition and external uncertainty. The innovation leaders of this company find new opportunities in the market and also reorganize those areas that is inefficient. This in turn helps to fill these gaps that exist in the market. It has been evident from the fact that the innovative leaders of this company came up with the product i-pod in order to fill the gap between computer and mobile phone. The strategic enablers of the innovation capability in this enterprise are – people’s management, organizational culture, innovation competencies and innovation strategy. Furthermore, the leaders of this organization help to build innovative culture within the workplace. The innovative thinking culture thereby helps to foster the process of innovation (Keskin, Diehl and Molenaar 2013). It has been reflected from recent study that this firm has been able to develop different framework of innovation and change through their systems theory and experimentation. However, this enterprise indentifies, protects and motivates all their innovation leaders in order to retain them in business. Not only this, the innovators of Apple are also given reward either in terms of money or recognition based. It has been stated by Tidd and Bessant (2014) that, innovation is generally internalized in the working of individuals. However, the innovation leaders of Apple regularly monitors the ongoing projects and also analyzes present activities for ensuring that effective innovation take place.

Strategic Innovation Management and Innovation Cycle

Apple ipod is in reward position as it attained larger market share and its growth rate is higher than other competitor’s product. Apple adopted “Blue ocean strategy” for innovating iPod and bringing it to market. Blue ocean strategy includes- insights about new ventures innovative positioning and tools for making it possible (Kim and Mauborgne 2014).. This strategy makes utilization of procedure termed as “ value innovation”. However, implementation of this strategy benefitted Apple Inc by reducing cost and increasing buyers value. Apple targeted customers of age more than 34 years to sell this product and thus it continues to lead a shrinking media players market. There has been no issues in this product at present and hence it business has been feasible over the last few years.

Apple’s iPod has been considered as one of its best innovation till today. This company has attained first position among innovative companies owing to exponential growth rate of iPod. This product has been the best example of increasing brand innovation strategy attained through effective as well as pragmatic innovation (Kapferer 2012). This product has attained huge success in the market owing to the creation of software that permits the users to directly download music from internet to device first at the launch time. At present times, near about 40% of the total profits that Apple gains mainly comes from the sale of iPod. It has been found out by some researcher that iTune is one of the vital reasons behind the success of iPod. The innovative analysis of Apple iPod has been explained with the help of SWOT. This analysis helps to provide an overview about the strength, weaknesses, opportunities and threats.  There are several weaknesses as well as strength from inside the company that can determine the result of whether the product might be successful or not. These are explained below:

Strength- Apple has extremely strong brand image in the marketplace. The sales of its iPod are increasing around the world owing to it innovative features. (Bhasin 2018). It has been seen from the recent study that this product has given this enterprise access to bigger sectors that are purchasing into other areas of this brand. The strength of Apple’s ipod are-

• Portable – iPod is portable as well as lightweight device that provides their customers convenience of music on the move.
• Space for additional apps- This device holds space for additional application for primary use and thus functionally making it highly innovative.
• Variety in its storage-Several variants of 8 to 64 GB makes it highly accessible to wider population.
• Other innovative features-This product provides accessibility to emails, which in turn adds value to its features. In addition to this, its music speed makes its most attractive to the music players in this industry.
• Status symbol- This product has been treated as the status symbol and hence makes it aspiring to every individual.

Weaknesses-Although Apple iPod has several innovative features, it has several weaknesses that includes-

• Very fragile-The glass of this product is easily breakable and thus increases risk in handling the product.
• Applications and videos are memory consuming- The installed application, videos and photos consumes huge space, which in turn creates difficulty for the buyer (Bhasin 2018).
• Battery is not long lasting-The ipod’s battery is not long lasting and thus gets easily discharged in few hours of use. Some recent facts highlights that this company has presented their customers with complimentary battery.

Opportunities-It also provides huge opportunities to this product over the last few years-

• People becoming brand conscious as well as individualistic-As the present as well as next generation people becomes brand conscious, this opens great avenues for this product.
• Changing requirement of customers- Since this enterprise tries to understand emerging requirements of their customers before developing this product, it helps Apple to retain loyal customers and attract new ones.
• Increasing level of income-The customers increasing level of income provides huge opportunity to this product for launching new as well as aspiring products.

Threats- One of the major threats to this enterprise is the increasing level of competitors within their industry. But in case of ipod , the threat occurs in the following way-

• Smartphones-The smartphones are considered as one of the major threats to this product owing to increase in demand for smartphones.
• Huge competition- It has been seen from the recent study that the music players market is getting intensified over the last few years (Bhasin 2018). In addition to this, almost all technological media enterprise has been entering with larger giants. As  a result, this creates threats to  Apple’s iPod.
• Continuous advancement in technology-As there has been continuous innovation in technology industry over the last few years, it creates threats mainly for the technology oriented commodity such as iPod (Edquist 2013)..
• Substitute products- As several kinds of substitute products have entered the market such as iPhone etc, it has created huge difficulty for the products such as iPod. However, this enterprise have been working firmly on the research and development and advertising campaigns in order to sustain in the competitive business environment.

Strategic Innovation Management in Apple

Business model innovation refers to the development of unique and new concepts supporting the enterprise financial viability involving its mission as well as processes in order to bring about these theories to fruition. The main aim of this business model innovation is to understand new sources of revenue by enhancing value of product and the method of delivery to their customers (Massa and Tucci 2013). This model helps in describing how the enterprise takes resources mainly in technology form as inputs and then convert it through markets and consumers into outputs. This in turn facilitates in connecting resource with realization of its economic value. in addition to this, this basically refers to the segments of customers being served, offering to customers, configuration of resources, creating customer value and attaining profit from all these activities with the help of value capturing mechanism. Business model innovation has become extremely vital for the enterprise since it has strong effect on its profit margins growth.

According to Planing (2015), business model innovation also facilitates the enterprise to stay ahead in innovation of product game. Although implementation of this model is costly, bigger enterprise adopts this framework in order to achieve success in this market. In case of Apple, the enterprise focuses on the manufacturing of innovative hardware. Creation of iPod and other associated application iTunes highlighted that this company involved distribution of music as activity. Despite expanding their business in their hardware product, Apple drastically transformed its business innovation model to involve relationship with its customers. However, through this method, this company expanded its innovation from product space to business model. The figure below reflects the change in revenue as well as profit after the launch of iPod business model.

The business model innovation canvas of Apple iPod is explained below;

There are several critical success factors that have lead to huge market success of iPod , which are explained below:

• Total integration-Apple is the first company that was successful in unleashing iPod as it integrated players, software and computer. Some of the enterprise did not achieve success in their product as they shipped other company’s music software in manufacturing it. This enterprise bought this product along with the market trend. It chose to use this ipod fire wire technology with much wider adoption (Kleinknecht 2016)..
• Design of this product- This enterprise designed this product in simpler way so that the customers does face any difficulty while using it. The volume control option of this device worked easily (Goldberg 2013). Moreover, it was highly durable as compared to other competing products as this company uses better parts in it, which in turn makes it highly reliable.
• Marketing techniques- This Company always stay ahead in the market by launching new software, hardware and applications for ipod. However, it became the fashion accessory for the customers especially teenagers. For achieving the status of fashion accessory, Apple partnered with several enterprises to promote this product. These partners involved- radio broadcasters, Facebook, mobile phone vendors, Myspace etc. Moreover, with the rising popularity of this Myspace, it created the profiles for iPod where customers downloaded several apps integrating with iPod. In fact, they strategized to keep their design same in order to make it easily recognizable (Mootee 2013). Apple also offered discount on iPod in order to make it attractive to its customers.
• Fairplay- One of the main reason of ipod success was digital rights technology of this comoany. Apple used Fairply for providing mechanism in order to prevent customers from sharing purchases of music. This was fairly innocuous with its computer limit and hence was success factor for iPod.

Conclusion

From the above study, it can be concluded that Apple’s iPod has become successful in the market as compared to other rivalries product. This enterprise has successfully attained branding of iPod as it was the first company to offer innovative features with inclusive solution between hardware and its content. In addition, effective strategic innovation management of this company facilitated them to attain success from this innovation. In fact, adoption of Blue Ocean strategy also helped to create value to their customers with the launch of this product. besides this, business model innovation of iPod also led to increase in both stock prices and market share growth rate.

References

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