Business Overview of the Company
Founded in April 1976, Apple, Inc. is an internationally recognized company that specializes in marketing, designing, and producing the mobile communication devices, portable music players, personal computers, as well as selling a range of related services, software, networking solutions, and digital applications. The company’ most popular services and products include iPad, iPhone, Apple TV, Mac, iPod, a portfolio of professional software devices and consumer applications, OSX and iOS systems, and a range of accessories (Reuters, 2014). Apple had made many acquisitions since March 2013 when it acquired a Silicon Valley startup WiFiSlam, which created the mapping devices for smartphones. Further acquisitions include Locationary Inc., Hostop.com Inc., AlgoTrim AB, PrimeSense Ltd, Topsy Labs, and Burstly Inc. All the new products and services have gained popularity among the customers because of the company’s multiple benefits, high quality, and constant innovation (Reuters, 2014). Additionally, Apple Inc. provides the application software, such as Final Cut Prot, Logic Pro, and Logic Studio (Reuters, 2014). The company also produces the Apple LED Cinema Displays and sells a variety of the third-party and Apple-branded iOS- and Mac-compatible peripheral products, such as storage devices, printers, digital video, computer memory, and still cameras (Reuters, 2014). Apple TV introduces the customers to television shows and movies with high-definition solution. Therefore, the main purpose of the research is to explore the phases of Apple development, in order to define how innovative thinking has contributed to the company’s success.
Foundation of Organization
The organizational chart of Apple Computer is complex because it focuses on a range of functions and responsibilities. The latter considers the major areas of company’s management including marketing, general counsel, iPhone software, industrial design, device engineering, retail, and software engineering. The Marketing Department seeks to identify the customer’s needs, as well as the products that can meet their requirements. The task of the general counsel is to coordinate all the organizational departments in Apple to work effectively and perfectly. The iPhone Software department is responsible for the development of a single product that focuses on management and analysis of similar software that is used in iPad. The Industrial Design Department focuses on creating the outlook of the Apple products, including the Apple Macintosh. Device engineering is committed to solving the problems related to the Apple products, except for the product design. The department staff also takes responsibility for developing the production tasks, including hardware and software manufacturing. Apple’s design is controlled by another department. The retail department seeks to maintain all business channels that are encompassed by the company, such as iTunes and Apple Store. Finally, software engineering reports on developing OSX operational system, as well as on introducing such Apple’s products, as iWork. The work coordination has been improved significantly with Steve Jobs’ appointment.
The above-presented structure shows that the managerial staff is working under the collaborative structure. A collaborative business structure is developed to ensure parities and establish a long-term relationship to achieve a common goal. A collaborative setting encourages people in their cooperative and individual work. It also makes individuals achieve the goals regardless of their position, as well as ensures effective cooperation and excellent teamwork. Collaboration facilitates the implementation of ideas by introducing the new structure and innovations. Therefore, the given organizational structure introduces the alternative paths for ensuring innovation, as well as encourages employees to offer new creative ideas. With regard to these models, Apple’s marketing organizational functions consider three main points, such as focus, empathy, and impute. To begin with, focus on the secondary issues should be withdrawn unless the primary concern is considered. The attention to the unimportant should be eliminated, as well (Hendrix, 2014). Empathy allows for outlining the customer’s basic needs in the most effective way. Finally, impute considers the way the products are introduced, as well as how they attract the clients. Every product is to be presented in a professional manner for the clients to satisfy the desired quality.
Apple’s success can also be related to the efficient work of the Human Resources Department. The Apple’s personnel are aware of the fact that human capital is the key to good performance and well-organized work. At this point, there are certain rules and principles that regulate the organizational activities and enhance the leadership structure. To begin with, Apple’s managerial department supervises all employees being aware of their roles and responsibilities. They should also wear different uniforms and understand what they should do. The workforce is delivered effectively; consequently, both the supervisors and managers can focus on such important issues as leading, providing high-quality services, and motivating the staff. Furthermore, if employees understand their roles, they will be more focused on the task accomplishment. If employees are fully satisfied with the position, they will do their best to deliver the highest quality of work. Finally, due to the fact that the companies fight for retaining talented and experienced employees, Apple follows its traditional principle and allows/encourage employees to receive the promotion within the organization. The main function of the financial department is to increase the shareholder value and determine what should be improved in the best way possible. The employees need to understand how to distribute assets to earn the maximum benefit from the strategy and to eliminate the risks in an appropriate way.
The operational plan is important for controlling all organizational activities. It includes all departments and fields, such as manufacturing, marketing, designing, human resources, engineering. In this respect, Apple operates in such geographic locations as Europe, Japan, America, and many others. People are grouped together in accordance with their expertise and resources to deliver the best outcomes. Additionally, the managers take greater control over decisions to be able to supervise the employees’ activities. Organization’s design guides the process and takes responsibility for integrating the information, people, and technology. The organization chart coordinates people and incorporates strategy, vision, and mission to accomplish the established goals. Apple’s collaborative structure, therefore, shapes the main elements of the organization’s design. In this respect, the collaboration and constant interactions of the members allow determining the best strategy in a specific context. More importantly, Apple’s innovative vision permits employees to be more open to the challenges and changes. Constant interaction and transparency have a potent impact on the coordination and technology management, resulting in customer’s satisfaction. In general, Apple is a well-structured company because all its departments coordinate both at vertical and horizontal levels. The company succeeded in managing different ideas and solving problems; consequently, it has been developing for the recent years.
Ideation Stage (Start Up)
As it has been mentioned above, the company was founded in April 1976 by Steve Wozniak and Steve Jobs in Jobs’ family garage in Los Altos, California. The two men began to produce computers. The innovation technologies and ideas introduced at that period established the foundation for creating one of the most powerful and effective technology companies in the world (O’Grady, 2009). Apple Computer focused on unconventional ideas that reconsidered the standards of marketing, manufacture, and innovation. The company’s commitment to challenging innovation and new possibilities in the computer industry was among the basic missions and visions of its creators. At the very beginning, Steve Wozniak, one of the co-founders, created the first computer, which was bought by the Byte Shop in Mountain View. The store was the first Apple’s customer, as well as the first computer retailer. Steve Jobs performed the role of retailer and advertiser who spread the information about the company’s products and searched for the new clients (OGrady, 2009). The official incorporation of the company was created in January 1977.
The creation of Apple II started in summer, 1977 when the founders invited their friends and classmates who were experts in IT and computer software to join the venture. During that period, Jobs decided to consult Michael Markkula, the marketing manager of the Intel Corporation concerning the possible implications of the development and growth of Apple Computer. As a result, Markkula purchased the third part of Apple Computer for $ 250,000 (Garsten, 1994). In 1997, the company’s directors hired Michael Scott to become the company’s CEO and first president. They also created their logo with the help of Regis McKenna’s advertising manager, Robert Janoff. The logo is still the official image of the company. When Apple I and Apple II successfully entered the consumer marketing, the company’s developers started working on the third version of Apple computer. Nevertheless, this project turned out to be a failure because of the disagreements between Scott and Jobs. When Scott resigned in 1981, Markkula became the new CEO of Apple.
LISA (or Local Integrated Software) was the next project supervised by Steve Jobs, who introduced the first personal computer with a graphical user interface (GUI). LISA contained such unique features as hierarchical file system, folders, icons, windows, multiple tasking, drop-down menu bar, mouse, as well as copy-and-paste function. At this stage of the computer and software development, Jobs chose the aggressive policy of constant innovation at any cost, which discouraged many employees but contributed to a significant turnover. It also decreased the employees’ retention rate. During the LISA project, Markkula was replaced by former PepsiCo Inc. vice-president, John Scully, who became the new CEO in 1983.
Survival Stage (Valley of Death)
Macintosh and NeXT were among Jobs’ subsequent projects, which caused many disagreements and misconceptions among the company managers and their subordinates because of Jobs’ following the innovation blindly (Garsten, 1994). Despite the conflicting situation, Macintosh attracted many developing companies because the new product included such features as desktop and bit-mapped graphics, among many other applications and functions. In this respect, it should be stressed that Macintosh has established a solid foundation for developing the computer industry. It also provided new design features for other digital and computer projects.
In the course of eleven years, Apple Computer continued developing the operating systems and computers. Nevertheless, when Jobs left the company, it entered the path of recession. Sculley resigned in 1993 because of the extreme pressure on some Apple’s managers dissatisfied with the marketing of the new products and services. Michael Spindle, the president of the European office, was promoted as the new CEO; however, the majority of the products issued during his presidency failed. In three years, Spindler left the office. In 1996, Gill Amelio became the new CEO, but this attempt was not a successful idea, as well (Garsten, 1994). After years of failures and unsuccessful designs, the company’s decision to hire Steve Jobs on the position of the CEO was the best option, which allowed Apple to renew its innovative philosophy and integrate a strong leadership style. Apple announced its decision to gain NeXT Software, Inc. in 1997. This software application was the solid platform for the Mac’s operating system.
It should be stressed that during the shake-up stage, the company had undergone many recessions and failures because of the increased among the competitors and the rigid competition with another recognized software producers like Microsoft. Specifically, Microsoft introduced Windows 3.0, which was considered the first universal software that could operate at any personal computer despite the producer. Although Apple’s sales amounted for over $7 billion in 1992, the company was on the edge of failure because the battles were focused on the software (Hitt, Ireland, & Hoskisson, 2012). Despite the challenges, the company strived to stay afloat. Therefore, it established the partnership with such companies as Motorola and IBM to manufacture the PowerPC chip. It was supposed to operate the company’s new products of PowerMacs, allowing surpassing the performance of the computers using the Intel microprocessors. Although Apple was striving to reorganize its structure, it still accepted the plan to acquire NeXT, which was the foundation for the new operating system.
Growth and Expansion Stage
Since the return of Steve Jobs on the position of the CEO in 1997, the company has started climbing up the success ladder, advancing its performance and increasing its revenues. The first problem for Jobs to consider was the long-lasting conflict between Apple and Microsoft regarding the use of the Windows graphical user interface. He made Microsoft pay off to Apple and issued Apple’s Office 98, which was compatible with the Macintoshes. Furthermore, Jobs started working on changing the Apple’s sales strategy to integrate direct sales both via phone and online. A variety of products was introduced into the market; Apple also launched a new generation of PowerBooks and PowerMacs, including the predicted emergence of iMac and iBook, which were sold at an affordable price. In 1998, Apple managed to bring a profit. With the return of Jobs, the company has experienced dramatic transformations. This fact is of particular regard to the Mac, which became the main product of the company. In order to implement this breakthrough, the company launched iLife in 2002, a program suite that included such applications as iPhoto, iTunes, iMovie, and iPod. After the emergence of Napster, Apple appeared among the pioneers of providing a cheap downloadable music through creating a network that allowed for the legal distribution of music. In such a manner, iTunes were among the key devices for exploiting the market. Similar directions were expected for developing iPhone and establishing the new mobile media functions.
Management Philosophy of Innovation
Apple’s management philosophy of innovation was based on Jobs’ powerful leadership and deep understanding of the future of developing the software applications. The company’s constant search for innovative technologies and Jobs’ unique personality proved that the human factor is also the key for sustaining a competitive advantage of the business, and enhancing its respectable image at the international level (Hitt, et al., 2012). Additionally, it should also be stressed that Apple is recognized as the collaborative company, in which strong motivation and constant goal pursuing are considered the pillars of successful business performance. Steve Jobs was aware of the fact that regular meetings and discussions with other heads of the departments allowed the CEO to take control over the process (Hitt et al., 2012). It was also considered an effective mean of integrating novelties and eliminating problems. In such a way, the new CEO could contribute to the company’s profitability and competitiveness at the market. Teamwork, therefore, was the key to enhancing the quality of the provided products and services. It should also be stressed that Apple has been one of the few corporations, in which an individual-based approach was implemented at the end of the 1990s. It was believed to be the core of successful innovation and change management.
Apple’s organizational culture is based on its value, vision, and mission. In this respect, the company is committed to introducing the high-quality PC experience to educators, students, consumers, and creative professionals all over the world by offering innovative software, Internet devices, and hardware. The company’s mission is designing Macs, PCs, OS X, iWork, iLife, and other professional software (Johnson, Li, Phan, Singer, & Trihn, 2012). Apple also takes control of the digital music revolution through the introduction of iPods and iTunes. It has also reconsidered the functions and goals of the mobile phones with the introduction of the App Store and iPhone. Finally, the company defines the future of the mobile computing devices and media with the introduction of iPad.
When it comes to the company’s value, it should be stressed that first, the managerial staff focus on integrating the innovative products for consumers who value brand-new technologies and ideas and consider them a mean of progressive development. Nonetheless, simplicity is still the core product concept because Apple’s products are to make the users’ life easier. Furthermore, the company’s managers believe that the need to control the state-of-the-art technology behind the products is the main issue. Participating in the market segment, which values innovation, is the key to the company’s success because it can allow Apple to satisfy the needs of the target audience. Although the variety of the products provided by the company is huge, Apple’s developers and designers believe that the attention to multiple projects is not the option for their company; instead, the focus on meaningful and interesting projects is the key to success. Finally, Apple Inc. has built a collaborative team, which gives a fresh insight of creative and innovative ideas. In such a way, Apple is still considered to be among the most successful corporations in the world.
The socio-cultural aspect is essential for the company that operates worldwide because the organizational culture can have both positive and negative impact on the company’s profitability. Certainly, the cultural diversity is among the major challenges that the modern companies face; a successful management of the issue can make the company gain a competitive advantage over its rivals. In this context, Apple encounters problems regarding its selling activities in the Asian regions due to the fact that 3G and 4G innovations are not popular there. Furthermore, the issue of cash trading in the Asian market is also a problem because of the high primary cost of the hardware industry. Chinese people prefer meeting the managerial staff while purchasing products and services; therefore, any online banking transactions, as well as commercial activities, are not in high demand among the consumers in the region.
Apple’s reliance on the consumer electronics and computer development is unprecedented; therefore, it is very difficult to be replicated. Despite the fact that many people can criticize the strategy employed by Apple, one could not deny that Steve Jobs’ leadership qualities and charisma have shaped the core of the company’s philosophy. Moreover, they have attracted experienced and expert employees who adhere to a strong corporate culture. In this respect, the concept of evangelism is among the main components introduced into Apple’s culture. To enlarge on the issue, corporate evangelists introduce people who promote Apple’s products and services. In order words, evangelism in business is associated with the development of the brand loyalty because the task of each employee is to advertise the products and search for the appropriate client who would definitely buy the product. In this respect, evangelists are not only employees, but also committed clients who are willing to buy Apple’s software and devices. Successful policy can be carried out only with the employees being fully committed to spreading the information about the company. With the return of Jobs, the company has witnessed the two major changes. First, the CEO encouraged the discussion of the new ideas and, second, Jobs created the vision that made employees believe that they work for the most respectable company. As soon as these changes were implemented, the company has regained its respectable image of the wealthiest company in the world. The uniqueness of the corporate culture is in the transparency and complete faithfulness to the company’s activities. Specifically, it has been reported that Apple does not follow the common-accepted standards of the working day for employees. Rather the company introduces a collaborative and innovative setting toward accomplishing its goals (Sawayada, 2011). The training programs have also been introduced to the company to teach employees how to speak with the clients, ensuring their motivation and willingness to buy the products. The task of the company’s managers is to support and encourage their employees who are supposed to have sufficient motivation for working in a more effective way and being creative. The company also provides people with the chance to cooperate with Apple and enter the Apple’s educational environment. With regard to the above facts, Apple could be considered more than a corporation; it is the community and the Empire with its unique culture and rules, which differs it from other famous corporations. Such a policy is beneficial because it attracts more consumers and makes them buy Apple’s products because of the brand loyalty.
The company’s ethics is another crucial point. Specifically, the company has tried to encourage its employees to display the corresponding conduct in all situates. Its success is based on delivering the high-quality and innovative products and services, as well as on the integrity and cooperation at all levels of the business interaction. There are four main principles guiding Apple’s ethics, such as respect, honesty, compliance, and confidentiality. In particular, the company has outlined a code of conduct that is applicable to all its operations (Sawayada, 2011). It has also provided the information on ethics on its website including the corporate governance, conflict management, and reports questionable conduct. Furthermore, Apple has created a Business Conduct Helpline that provides employees with the possibility to report about the cases of misconduct, in order to acquire greater control of the employee culture.
Apple’s developers are aware of the fact that the problem of intellectual property is a key concern in the software industry. Therefore, they have also taken corresponding measures for enhancing the policy and underlining the importance of organizational culture (Sawayada, 2011). At the same time, the company encountered multiple lawsuits against Microsoft when Apple had licensed the device. Upon Microsoft’s release of Windows 2.0, Apple declared that the agreement related to Windows 1.0 only; besides, Microsoft’s Windows were reminiscent of Apple’s Macintosh. The court, however, supported Microsoft, stating that the license did not include any allegations. Despite the similarity between the two programs, the Court decided that Windows had not violated the copyright. There were many other lawsuits, but they related to the period of Jobs’ absence in the company (Sawayada, 2011). These gaps were taken into consideration, and Jobs has managed to restore the corporation image as soon as possible. Although there were few lawsuits against Cisco Systems in 2007, the case ended with the mutual agreements.
Apple’s Strategy Ensuring Its Sustainable
As it can be concluded from the company’s mission and vision, Apple has established a strong strategic framework, within which it remains one of the most successful international ventures. Specifically, it has been concluded that the company is fully committed to delivering the best experience to its clients via innovative software, hardware, peripherals, and services. The company’s business strategy encourages its unique ability to develop and design the new systems and provide the most important and meaningful solutions to their clients. According to the company’s strategy, Apple is focused on the continuous improvement and is scrupulous in developing innovative technologies and devices (Johnson et al., 2012). Furthermore, the Apple continues expanding its platforms for the delivery and discovery of the third-party media and digital platforms by means of the iTunes Store. Within it, the App Store and iBook application have been developed and have won the attention of the customers.
In 2011, the company launched the Mac App Store, which allowed clients to search, download, and install applications for their computers. Apple also encourages the community to develop the third-party hardware and software and digital content, which contribute to the company’s beneficial options. Finally, the organization’s strategy also implies expanding and developing a distribution network to reach effectively more clients, as well as provide them with the post-sales and sales support of the highest quality.
The strategic framework shaped within the company underlines the importance of technological segment. Indeed, in the computer software and hardware industry, technology is regarded the major factor that plays a pivotal role in achieving success. Additionally, “innovation of technical progress provides better, faster and cheaper electronic products every year as it also creates a market segment as new products and markets are created” (Johnson et al., 2012, p. 4). At this point, the technical innovation makes the industry more competitive in general. Despite the successful strategy, there are certain threats to Apple’s ideological support. Specifically, as Apple strives to create more and more products, its potential rivals will also work on new products and services in response. However, the prices on these products could be more affordable, leading to a decrease in demand for Apple’s products. For instance, ASUS and Acer have launched their products, such as mini-notebooks, which might develop into the innovative tablet market. Therefore, technological change occurs with great dynamics and, if Apple fails to keep up with the competition, it will cede the positions to its rivals.
The company’s ability to remain competitive was also associated with Jobs’ constant control over company’s partnerships and relations. Specifically, the CEO was always clear in terms of vision for the goods and products; therefore, many suppliers were frustrated with these working traditions. Nonetheless, maintaining fruitful supplier relations and keeping control of the products quality have created a balance that Apple manages to maintain to be ahead of its competitors (Hitt et al., 2012). In addition to the establishment of the fruitful relationship with suppliers and partners, the company also attached significant importance to the social and corporate responsibility issues. Specifically, Apple has taken advantage of the corporate and social responsibility issues to increase the market share and attract more employees. Specifically, Apple now utilizes aluminum for its producers because it makes devices more efficient, lighter, and much easier to recycle. Therefore, it is logical that the use of environmentally friendly materials in its design is the first step to reducing its impact on the environment. It is also a mean of attracting the more environmentally aware clients. Additionally, Apple has also released the lithium metal batteries, which reduce the usage of toxic metals (Belich et al., 2009). To contribute to the transparency of reporting, the company has issued the Product Environment report and imposed limitations on specific substances and materials used in the production. Additionally, the corporation has designed the eco-friendly device, the LED display that is made of arsenic-free glass. It is beneficial not only in terms of environmental protection but also in eliminating the mercury detected in the LCD screens, consuming 30% less energy than other notebooks.
The Role of Entrepreneurship in the Development of the Company
It should be recognized that Apple is regarded as the wealthiest and most successful company in the world, the business and products of which have contributed to the development of the Apple Empire that can be perpetuated in the history of business and commerce. The company growth rates are the highest ones among other rivals; its revenue has experienced 50% increase within three-to-four years. Previous CEO of the company, such as Steve Jobs and the current CEO Time Cook have managed to contribute to the success and encourage the constant and rapid growth of the company (Johnson et al. 2012). More importantly, the company continues to break new records. In 2010, the company outperformed its $15 billion revenue. The next year, it demonstrated the doubled rate and its revenue amounted to $28.5 billion. Such an index is impressive despite the non-holiday season. At the same time, Apple’s cash reserves managed to reach the net worth budget of the small countries. All the company’s products were put on sales in their own markets.
The role of entrepreneurship is based on the fact that Steve Jobs was among the most influential figures in the history of the company that made it possible for Apple to become the wealthiest business (Edmiston, 2004). Therefore, the main approach to managing this issue is to consider the major roles and responsibilities that consider the analysis of specific norms, algorithms, and strategic frameworks that shape the main business model of the company.
Business Model Analysis
As it has been mentioned above, Apple’s success is based on its outstanding CEO Steve Jobs, high-quality branded iOS products, including iPad, and their sophisticated and innovated philosophy. In terms of introducing the theory of innovation, Apple’s business model is successful and efficient because of the company’s steady growth. To be more exact, the innovative framework enterprise explains that the unity of organization, strategy, and finance focuses on delivering the higher quality products at lower prices. Although the innovation process is collective, uncertain, and cumulative, the implementation of a certain strategy and business model is urgent (Lazonick, Mazzucato, & Tulum, 2013). At this point, investment in innovation and technology depends on the incentives, experience, and skills of executives that practice strategic control over the process. It implies the development at lower costs and introduction of a high-quality organizational integration. With regard to the cumulative nature of the innovation process, the ability of the company to maintain innovation starts from the moment when the investments are successful and are dependent on the financial commitment (Lazonick et al., 2013). In other words, organizational integration, strategic control, and financial commitment stand at the core of successful conditions for promoting the company’s performance and profitability.
In the context of Apple’s business analysis, the implementation of innovative strategies is associated with the organizational integration, which is a set of relations and activities that motivate people to take different responsibilities and performance functions. It is also a range of experiences and skills, which should be practiced to reach the maximum benefit (Lazonick et al. 2013). The purpose of organizational integration introduces developmental complexity of the innovative activity, which is the need for constant learning and advancement, along with the necessity to protect the higher degrees of using innovative tools in case these investments are imposed on the low unit costs.
In general, Apple’s business model is based on such aspects as strategic control, organizational integration, and financial commitment (Lazonick et al., 2013). To enlarge on the issue, the strategic control stems from the fact that the company should take control of all its operations. Furthermore, organizational integration implies transparent exchange of information and constant cooperation that would ensure trustful relations among the employees. Finally, financial commitment relies on the regular reporting and constant checking of numerical data.
In conclusion, it should be stressed that Apple has undergone a complete cycle of development from the ideation stage up to the growth and expansion phases. What is more important, the company has been concerned with such issues as human resources development, innovative vision, and strong leaderships. They are the key aspects of Apple’s rapid growth and successful development. Steve Jobs, who is currently regarded as an iconic leader, prepared the main underpinning and foundation for the company’s success. He managed to make the company the most profitable software developer in the world. The focus on employees and clients, constant control, and collaboration stood in the core of his ideological vision and mission. In such a way, Jobs reached the top results in financial and ideological terms. Change management and commitment to innovation were among the main issues, which were considered by the managerial staff. As a result, the company’s leaders have managed to sustain a competitive advantage over other software manufacturers, such as Microsoft. Since the very beginning of the company’s formation, Jobs was an ideological leader who never gave up and who was committed to his goals and readiness to introduce innovative and advanced technologies. He also paid attention to the company’s mission and employee’s engagement. During the survival stage, when the company experienced failures, Jobs resigned. This step made the company’s managers make the wrong decisions. However, Jobs was aware of the fact that the human factor and aspiration to introduce innovative ideas, along with constant advertising were among the leading aspects of success. More importantly, Apple is currently regarded as one of the most famous brands in software development and industrial support. Despite recessions and failures, the current CEO Tim Cook is following Jobs’ ideology; he uses every opportunity to introduce innovations and encourage the constant technological advancement. Creativity, financial commitment, and organizational integration shape the business strategy of the company. Finally, the role of entrepreneurship should not be underestimated as it has contributed to the current mission of the company.