Case Study - Innovation Strategies @ Apple Inc.

I. Executive Summary 

Innovation is very important for every business in recently, the success of company in the competitive
environment eighty percent come from innovation. Without innovation the sustenance of business will not be long
lasted. Without innovation the whole world will be advance, without innovation the whole business won’t
be globalization. Companies must innovate in order to keep ahead of their competitors. If an organization wants to
create a business strategy that keeps it at the forefront of innovation, it must develop ways of making that strategy
work. Being innovative does not just involve using the expertise of market researchers, scientists and product
developers to create new products. It also involves using the capabilities of everyone within an organization to
generate the processes that help the new product to reach the market quickly and efficiently. It is after all people
who innovate and not companies, and they need the right environment, which provides both support and
encouragement.

So why some are companies more successful innovators than others? One theory about culture contrasts defender
and prospector organizations. The defender culture resists change and favors strategies that provide security. This
is usually supported by a bureaucratic style of management. On the other hand, a prospector organization thrives
on change and innovation. It differentiates its products in a creative and flexible working regime.

II.Literature Review

1.1 Innovation

The term of innovation can be known as the simple work as introduce something new or something different, in
the business it is an imperative to continuously innovate, not just for sustain competitive advantage, but for
development and survive in the globalization era. Innovation is not the only route for growing up business, but is
the key to let business stay on the battle over a period of time. In the order word, growth achieved through
acquisitions can easily become stagnant if the enterprise still cannot innovate. According to Damanpur and
Gopatakrishnan (2001) innovation for organization means adapting the environment.

1.2 Why innovation Strategy?

Developing an innovation strategy makes sense for organization that need to manage innovation effectively and
make organization more systematically. Strategy for innovation is the key success and it can the main factor for fail
for organization. Approaching innovation is the way to ensure organizations have thought carefully, and the it the
guideline for organization when to start and how to measure result of the innovation. With the innovation strategy,
it can implemented and know what the next step should be determine the strategy whether delivery result that
company was hoping for.

1.3. Innovation concepts

To understanding the different approaches of innovation is very necessary for organization because different type
of organization need different approach of innovation strategy. When drawing up the innovation strategy it need to
understanding the approach, different type of innovation strategy have different implications on the resource of
organization. For example, in term of technology industry for a company that want to breakthrough innovation it
need much investment in financial position and human resources like Apple Inc. every year this company invest in
Research and development billion of dollar. On the other hand, the innovation strategy implication needs to
include the risk also which are including reputation, financial position.

1.4 Type of innovation

1.4.1 Focus and Orientation

In the focus innovation it relate to how to make up of product in term of technology. The focus type is introducing
new product to the market while product innovate focus more on improving the efficiency of the organization. In
addition, innovation is according to organization, Deschamp (2005) which is called mode, there are two mode
“bottom-up” and “to-down”.

1.4.2. Degree/Extent of Innovation

According to the Gilbert (1994) have been stated that innovation are radical, it mean radical is the nature so it need
to be change according to the mindset of customers, organization, so produce innovation need to develop from the
original. The term radical and incremental is referring to the evolutionary and revolutionary for the same type of
innovation.

1.4.3. Timing

Innovation can be classified in term of timing, because it related to the implementation of the relative innovation to
the competitor. For the example in this case Apple Inc. this the first company that introduce iPhone in the market,
the new revolutionary on mobile market start to change, in this case we see the trend in innovation that change
mobile area. The first-to-market, first –to-adopt, etc. The classification in this type can be state as the imitative /
acquisitive, because the follower are likely to be imitative, it different from the innovator is the first-to-market.

1.5 Background of Procter & Gamble

AG Leaflet, the President and Chief Executive of Procter & Gamble, outlined the importance of innovation to the
company. He would like to develop a business in which ‘big ideas attract the capital and talent they need’ and
points to the innovation. Procter & Gamble is now a global corporation, serving almost five billion consumers, with
operations in 50 countries and products selling in more than 140 countries. With a range of brands as diverse as
disposable nappies, snacks, juice drinks, shampoos, laundry detergents and feminine protection products – this
makes Procter & Gamble one of the world’s largest consumer goods companies.

III. Innovation Strategy of Apple Inc.

The term Innovation for apple mean “introducing something new or different to their customers”. Apple Inc. is one
of the largest company related to technology, mobile, and personal computer. In the history this company have
been meet a lot of difficulty inter of financing, and production Innovation. The slogan of Apple Inc. is “Think
different”; this word is the main factors for this company to go through obstacle before Apple Inc. can stand in this
position. In the technology industry innovation is the key for success; also it can be the main factor that can make
company fail. By looking back to the history Apple Computer is the company that nearly bankgrupt, but because of
the innovation strategy of Steve Job, it can make bring this company back to life. Not all companies can meet this
luck, but one of those lucky company with humble beginnings is Apple. In order to claim the idea of innovation is
the key for bring effectiveness for company; this paper will explore the previous products that Apple innovate as
the reference to pro this idea.

Apple Inc. have been recognized as a real innovator in the personal computing industry, over 30 years ago. The
greatest innovation Billy of Apple is the way that company implement the exiting innovation strategy that already
developed. The innovation strategy of Apple are People. In the follow section will explore the innovation, which
execution by Apple Inc. how this company get the greatest success on their products. According to the research the
greatest success of Apple Inc. are GUI (Graphics User Interface), iPod, iPhone, and iPad.

3.1. Apple Currents Challenges

Apple’s biggest challenge is been able to find the appropriate replacement of the visionary Chief Executive Officer
(Steve Jobs) who died on October 2011 and was responsible for turning the company into what it is currently.
Apple needs to pursue Steve Job’s strategies that propelled the company to new heights as the company was
viewed as been innovative and market leader when it comes to new products. Another challenge posed by Apple is
that there is increased completion from established competitors like HP, Google, Microsoft and Dell among others.
In addition, environmentalists have regularly accused Apple of not properly disposing its old products where as
high level of toxic chemicals are believed to be contained in Apple’s products.

3.2. Innovation strategy on GUI (Macintosh)

According to the Isaacson, (92) Apple II (Macintosh) at the time can be sold millions fo units it was the new
production innovation at that time, since that time Apple pay more attention on product development and
innovation. In that time Apple have been change the history, change the world of personal computer. The strategy
of this innovation is use the exiting innovation to create something that new. For example Steve Job and other keys
developers have been took the knowledge from Xerox PARC and started working on changing the world of
Computer in term of GUI.            Then the Xerox bring their products related to GUI to the market after Macintosh
introduced the Apple II to market, then Xerox fail. At that time apple raid on Xerox, this is the greatest innovation
and the biggest heists in the technology industry in the chronicles. During that time this two company had equal
opportunities to bring their product to market and can bring a winner to market, but Xerox didn’t and Apple did,
this the key success for the Apple in the future.

3.3. Digital Hub Strategy

In 2001 Apple Inc. have been introduce the “digital hub” to the Macintosh customers; at that time Steve Job believe
that the new innovation strategy of Product development on the Mac could change to idea of PC user to Use Apple
product. Moreover, Steve Job believes his idea can entrenched the digital lifestyle. This innovation of digital hug,
mean that all the digital device have to link together in one hug, the music player, mobile phone, cameras,
therefore; the Mac can be the “hub” to make those digital device could appear in the market. This vision it bring the
Apple can product the unique product for in term of hardware and software, which become the unique product in
the PC industry.

3.4 Operation system innovation strategy

In 2001 Apple Inc. have been introduce the “digital hub” to the Macintosh customers; at that time Steve Job believe
that the new innovation strategy of Product development on the Mac could change to idea of PC user to Use Apple
product. Moreover, Steve Job believes his idea can entrenched the digital lifestyle. This innovation of digital hug,
mean that all the digital device have to link together in one hug, the music player, mobile phone, cameras,
therefore; the Mac can be the “hub” to make those digital device could appear in the market. This vision it bring the
Apple can product the unique product for in term of hardware and software, which become the unique product in
the PC industry.

3.5. Apple Inc. in the next decade

Innovation is the key success for Apple Inc. in the next few year there still be the big battle in this area. The Apple
Inc. is “changed the rules” for technology industry again and again, and it capitalization reach to $220 billion in
2010. By comparing to the other company in the same industry Apple step before those company those company
speeding up the company but it fail can crash badly. In the next decade technology industry can’t not predict which
one is company could stand in the front line, and which one have to walk away, it base on their innovation, and
how their bring those innovation in market in what speed.

Strategy – Innovation at Apple Inc.

a. Strategy & Leadership

Steve Jobs is a visionary leader and acts as Apple’s chief innovator.  He believes that in order to innovate “You need
a very product-oriented culture….Lots of companies have tons of great engineers and smart people. But ultimately,
there needs to be some gravitational force that pulls it all together.”  Steve has primarily been that gravitational
force.  Apple leadership is based around a tight management structure with teams led by hands-on managers.

Apple’s strategy of innovation is customer centric.  Apple aims to provide for all basic human needs and create a
desire for its customers to interact with their computer or mobile device.  The goal is for the customer to love their
machines – focusing on every little detail down to packaging.  Key to this strategy is the relentless pursuit of
product improvement.  In this pursuit, Apple maps out their product’s innovation cycle 5 to 10 years into the
future.  As a result, this innovation platform makes it difficult for competitors to catch up.  Lastly, Apple takes a
broad approach with their products – analyzing customer needs and attempting to fulfill them.  Products such as
the Apple TV or the Mac Cube have more or less failed, but Apple’s portfolio approach allows the company to
market a relatively streamlined number of products and see what catches on.

b. Idea Sourcing & Design of Innovation

Steve Jobs as the chief innovator is very involved in the sourcing of the initial idea.  For inspiration, Apple
oftentimes starts with a new idea for a multimedia interaction and designs a product that will enable that
interaction.  Rather than looking to solve specific customer needs, Apple studies new ideas and how they can
promote customer interaction.  By taking this human-centered approach, Apple thinks differently than their
competitors and improves the customer experience.  For example, the iPod was not the first mp3 player, but it was
the first mp3 player that focused on simplifying the interaction between the music store, computer and player. 
From the outset of the innovation process, Apple utilizes Tim Brown’s concept of Design Thinking – focusing on the
customer’s experience in design.  This iterative technique results in a smoother, simpler product.  The product
development team is a tight-knit group that is constantly testing and retesting each other’s work.

c. Development & Experimentation

Apple products are not rolled out with beta testing; rather they are presented in a final and perfected form
(oftentimes in an extravagant presentation).  A simple, beautiful, perfected product straight out of the gates is a
result of a painstaking development process.  Apple’s development and experimentation process is veiled in
secrecy.  Steve vaguely describes their development process as “The system is that there is no system. That doesn’t
mean we don’t have process. Apple is a much disciplined company, and we have great processes. But that’s not
what it’s about. Process makes you more efficient. What we do know is that there are large cross functional teams
with hands-on leaders.  Even Jobs gets involved at the product development and experimentation level.  The team
is given a defined timeline to encourage the process.  Apple engineers are famous for working 90-100 hour weeks
for months at a time to hit the predetermined hurdles and deadlines.

d. Shared Value

Apple products are not rolled out with beta testing; rather they are presented in a final and perfected form
(oftentimes in an extravagant presentation).  A simple, beautiful, perfected product straight out of the gates is a
result of a painstaking development process.  Apple’s development and experimentation process is veiled in
secrecy.  Steve vaguely describes their development process as “The system is that there is no system. That doesn’t
mean we don’t have process. Apple is a much disciplined company, and we have great processes. But that’s not
what it’s about. Process makes you more efficient. What we do know is that there are large cross functional teams
with hands-on leaders.  Even Jobs gets involved at the product development and experimentation level.  The team
is given a defined timeline to encourage the process.  Apple engineers are famous for working 90-100 hour weeks
for months at a time to hit the predetermined hurdles and deadlines.
e. What next?

With no apparent succession plan, how will Apple continue down the strategy of constant innovation?  Without
Steve Jobs as the driving force and visionary, there will be a large leadership gap that will need to be filled.  Can
that be filled by one man such as Tim Cook, the stand-in CEO?  Or will there need to be several executives filling
this role – a visionary, a salesman, and an innovator?  What would you do if you were the Board of Directors in
anticipation of the void left by Steve Jobs’ pending departure?

IV. Conclusion

Innovation is the heart and the key for company can step forward to reach the sky, or it could be the main factor to
push company back to earth. The concept of innovation is the key to positioning one company in certain place, and
it can bring the effectiveness and contribute the success for company in the modern era. The advance of technology
could bring the more competition in technology industry, in order to stand on the battle file only strategy. So, those
strategy is the innovation strategy. As the example above, Apple Inc. pay more attention on innovation, and invest
large amount of money for innovator (out source developer). This strategy is the main factors to push this
company to step forward before other company could do. Moreover, just only innovation strategy is not enough for
bring success to business, but how to respond to market, and how to enter to market (introduce the new
innovation to market) is the main key for success be the leader and followers. In the is case Apple is the best
example for exploring this idea related to innovation strategy for modern industry