Table of Contents
This is the beginning
Context organisational
Innovation is important
External surroundings
Culture, reward systems, production methods, and structure
Exploration and Exploitation (R&D), Research and Development
Competitive Advantage
Allies and networks of cooperation
Conclusions and management implications
Opening
This is an introduction to the text.
Apple is my chosen organisation for this project. Apple has been described as the leading innovator in technology of the 21stcentury. Apple is an international technology company. I will elaborate on face recognition in the new iPhone.
Organisational contextApple comes up with fresh ideas all the time, whether it is new designs or minor changes in existing products. An example of a significant innovation is the opening of the iPhone by using facial recognition. Apple also explores new markets through exploitation and the iWatch. Updates to iOS on iPhone are a great way to balance exploitation and minor changes.
Importance of InnovationInnovation means using the new knowledge of technology and markets to create a service or product customers will love (Pontiskoski & Asakawa, 2010). iPhones are a product of marketing and innovation. Innovation can be divided into four types: process, product, marketing, and organizational. Innovation is how companies gain a competitive edge. They view innovation as a broad concept, which includes both new technologies and ways to do things” (Joe Tiedd & John Bessant P16). Product innovation can be defined as the introduction or improvement of products and services. For example, it could involve improvements in software and functionalities. This can be a huge difference from the existing service or product, such as the new face-recognition feature in the iPhone X. There could be small changes in the form of technical improvements. Or, materials could be changed to improve the performance. This is how Apple updates their iOS products.
Product innovation would include techniques that could increase production and reduce costs. Marketing innovation is a marketing scheme that tries to change packaging, pricing, promotion and placement of products. The product must benefit from the changes made to its appearance or form without changing the function of the products. Marketing methods that are new will mainly be introducing different sales channels, or platforms for reaching potential customers. Product promotion could include the concept that the product is promoted and offers extras to the customer, like loyalty cards. (Pervaiz D. Shepherd and Charles K. Ahmed: p4) says “Innovation defines the future of humanity”.
Innovation is important for any business, because it gives the company a competitive edge. Being innovative can be the main reason why a firm creates a successful product. The importance of technological innovation is crucial to productivity.
Apple could be affected externally by factors such as pricing, availability and competitors. Apple is a very competitive brand. Apple not only competes in the smartphone industry, but also in tablet, mobile payments and laptops. Apple’s biggest competitors are Samsung & Microsoft. Both companies compete in a variety of markets, including smartphones & tablets. Apple is aware of this and knows that the competition is the primary threat to its growth and profit margins. Samsung is the main iPhone competitor. While the android app may be larger, Apple has a much higher profit margin.
“Competition in the process of innovation is vital” (Teece, 1992). Apple’s need to stay innovative is influenced by competition. This is why they came up with the new idea of facial recognition for the iPhone X. Apple also releases updates frequently to keep their older iPhones competitive. Research has shown that competition and innovation are closely related. (Nickell, 1996; Blundell, et al., 1999).
One external factor that was mentioned is the availability of a product and its demand by customers. Apple’s loyal customers are crucial to the success of any organisation. Businesses must adapt to customer expectations and demand, and apple is a good example. Apple simply produced the best quality products, and impressed customers time and again with the newest hardware and software. Apple met the customer’s needs with face recognition. The face data was captured and analysed by 30,000 invisible dots, creating a depth map and an infrared photo of the face. This would also help to improve the overall innovation process by allowing for continuous interaction and feedback from the consumers.
The pricing of products could also play a role in innovation. Apple may appear to price their products excessively, but the company focuses on selling the best smart phone with the most up-to-date software. Apple have also managed to strike the right price-quality balance. Apple products sell out quickly because they are available.
Apple could have been affected by internal factors such as conflict among employees. Apple combats this by giving employees more responsibility instead of hiring managers. This keeps costs down and gives employees the opportunity prove themselves.
Apple’s system rewards employees for their hard work. They can then be rewarded with a promotion or an increase in pay. Organisational innovations would include a change in structure and introducing procedures to conduct work. This could lead to a new way of running a business. This could also include introducing new ways of working, such as new distribution methods or external relations. These would allow for a greater exposure of an organisation. The organisation’s performance will be improved by keeping the workplace satisfied.
All of this would help to achieve a competitive edge. In order to achieve this, Apple would hold ‘phony meetings every two week with the internal clientele in order to educate decision-makers about the design orientations being explored and influence what they perceive the final product as’ (Breillatt, 2011, p.1). This would allow them to monitor any progress on early targets and specifications for a product.
Apple continues to be a leader in new technology and innovation. Apple is a diverse company, and this diversity benefits both the organization and its customers. Apple’s products are designed to appeal equally to those who have high salaries with large disposable incomes and those who do not. Apple has benefited from this smart marketing strategy. Apple’s focus on diversity and forward-thinking has been rewarded by its strong market position.
Apple’s design team can create the next-best design by separating them from other apple employees. The designers used a number of different techniques to create new designs. Simple as the funnel, the designers were able to produce ideas that would work.
Exploration and Exploitation – Research and Development. Innovation can be divided into two types: radical innovation and incremental innovation. Research and Development are integral to the innovation cycle. In terms of radical innovation, it can mean a substantial change from the previous product or process. Incremental innovation is the small changes to the product. Both radical and incremental innovation are required by many organizations. To generate profits, radical ideas require exploration. Apple iPhone’s radical innovation was later exploited via subsequent iPhones. Exploration is usually the basis for radical innovations. In the beginning, unlocking the iPhone had been done by entering the correct digits. However, as smartphones became more advanced and sophisticated, finger recognition was added. Apple has once again shown innovation by allowing users to unlock their products using face recognition. Apple has shown a remarkable level of innovation. Apple have shown that they can stay relevant and create new skills in many different ways. Apple has introduced new lines of business through the apple watches. This product is a way that they have engaged customers by being innovative. Apple has developed a watch that incorporates the same functions as an apple device, but it is designed to be worn on a wrist. This watch would appeal to people with different tastes and preferences. Apple iWatches are a great way to express your style. Apple watch is only limited to making calls and using Facetime.
Exploration, which is the basis of radical innovation but can also be detrimental to a company that wants short-term success. In order to sustain and maintain exploration, organisations have decided to focus their efforts on successful practices. It has also been shown in studies that organisations prefer incremental, low-risk innovations to radical ones. (McDermott & O’connor 2002).
Exploitation is the foundation for incremental innovation. Exploitation involves the improvement and evolution of products already in existence. Exploitation has been described best as “refinement and choice in production, efficiency, selection, application, and execution” (March 1992). Apple uses incremental innovation to enhance existing skills. IOS, for example, is a good example of this. It allows customers to buy existing Apple products like the iPhone, iPad and iPod Touch even if they don’t want the latest iPhone.
Through organisational ambidexterity, you can maintain a good balance between explorations and exploitations. Organizational ambidexterity involves engaging in activities that Apple already has the capability to perform, while also exploring new capabilities. This is viewed as opening the door to both radical and incremental innovation in the market. Apple has exploited it, for example by entering the watch market through the iWatch and still selling iPhones. The ability of an organization to manage today’s business needs while being flexible to the changing environment (Raisch & Birkinshaw, 2008). Apple’s new products, including iPods iPhones iPads and iWatches, demonstrate their dual-level of organisational ambidexterity. Apple products have been used to create new spaces for competition. Tushman & O’Reilly (2000) state that the management of business today is “aligned to meet current demands and adaptable to changing environments”. Apple also exploited their position in the Apple Retail Stores through the supply chain, the customer service, and services offered to each individual customer. Apple has been exploiting every point, even in customer engagement.
Inter-firm ambidexterity is one of the styles of ambidexterity. The others are structural ambidexterity. Separating exploration and exploitation between different departments of an organisation would be structural ambidexterity. (Tushman & O’Reilly 1996, Hansen et.al. 2018, 2018). Apple would pursue this goal as it suits larger organizations better, while smaller companies benefit from leadership or context-based ambidexterity. 2006).
Apple’s competitive advantage is largely due to their innovative spirit. Apple added face recognition to the iPhone 4S in order for it to have a competitive advantage in the industry of smart phones over Samsung. Apple was the very first smart phone company to introduce the concept of unlocking the phone by facial recognition.
It is important to note that the competitive advantage can be linked with a business plan called (FMA), a strategy which describes the advantages gained by a firm which introduces its product or services first. Apple was not the very first company to introduce touchscreen smartphones, but it was the first large-scale organisation to achieve that. FMA is a great way for a business to create a solid foundation. It also gives them the recognition they need to grow things like customer loyalty. Apple, which does not have FMA with respect to the Apple iPod or smart phones generally, has still been able to maintain a strong competitive advantage over the years by providing a high-quality innovative product. Apple gained a competitive advantage by being the first company to release a multi-touch consumer product, the iPhone.
Alliances & cooperation networksApple joined IBM in an alliance to redefine work. This is a new approach to iCloud services, which will include device management, analytics, security and mobile integration. Strategic Alliances are ‘…voluntary contracts between firms or between firms and institutions, involving the exchange, sharing of technologies, products or services. They can arise from a range of motives or goals and take many forms. : 293)
Conclusion, implications and recommendation for managementIn conclusion of this assignment, we have seen that innovation has a big role to play in any company if it wants to grow as a business and keep up with rivals. Apple has demonstrated over the years how they are innovative and have kept up with the times by introducing new ideas and technologies into the market. Examples include face recognition technology and iOS updates that keep customers happy. They have been able to dominate the technology sector by keeping up with rival companies like Samsung. Apple’s organisational ambidexterity, which balances radical and incremental innovations, has allowed them to lead the smartphone industry and excel on the market.
Parents who have photos they don’t want to show their children or family members could find a parental control application valuable. You could unlock the app with a finger scan or unlock code. Or, you can follow the innovative new idea of the iPhone and unlock the protected app with face recognition.
Apple’s products could benefit from a dramatic improvement in battery life. This is a second suggestion that nearly all apple owners would like to see. Apple’s products die quickly, but they would have a hard time creating a phone that is so productive while also having a short-lived battery. Apple needs to work on a battery that lasts longer to please customers who complain about their phones dying so quickly. Apple is a large organisation that can expand even further. They could enter the fashion market, like they did with iWatch. This would bring in potential new customers. Apple has a good organizational ambidexterity, so they are able to do this and still dominate the markets they currently hold.
