Describe about the Case Study for Innovation and Risk Management for Growing iPhone Sales.
The process of identification and analysis is known as the risk management. The risk management occurs when an investor examines and attempts to enumerate the potential for losses in an investment. A company gets exposed to a number of financial risks when it makes an investment decision. The quantum of those risks mainly depends on the sort of the financial instrument. The risk management is thus practiced by the fund managers so as to diminish and control the revelation of investment (McNeil et al. 2015).
Innovation is the process that helps to shape the way which can be tried and managed. Innovation is mainly defined as the new idea that is invented. Innovation is mainly viewed as the application of better solution in order to meet the new requirements. This report deals with the innovation strategy of the company Apple (Drucker 2014).
The rigorous growth strategy of Apple transmits directly to the strategy of the company that is related to pricing, promotion as well as the other areas of business. The ability of the company to maintain the strong position in the market is strongly determined by the growth strategy of Apple. Even though the prices of the products are high, Apple is successful in selling them due to the innovative designs that it incorporates in its product. The growth strategy mainly focuses on differentiating the products of Apple from the other products (Khan et al. 2015).
Since the competitors in due course catch up with the new products, the growth strategy of Apple induces the company to innovate the products so that it can keep itself at the forefront of the competitors. Apple has experienced tremendous growth over the past few decades. The reason for the strategic growth of Apple is the technology sector that has helped Apple to transform the sector and as a result, Apple has capitalized on the gesture of technological dependence. As a result, Apple has become increasingly international. As per the report, the primary growth strategy of Apple is IPhone. IPhone is a part of innovation as innovation is genius whereas invention is easy. IPhone is created ecology of media content, certification, claim, development and it is combined under one roof (Hitt et al. 2012).
Though IPhone was invented, it is a genius invention that changed the world of technology and is thus categorized under innovation. There are very few inventions which becomes a successful innovation Apple needs to step up the efficiency of its global scale efforts as Samsung, which is the primary competitor of Apple. However, Apple should shift from shift its perspective from into a transnational perspective rather than an international perspective.
Apple has finally attempted to penetrate emerging markets with the introduction of iPhone 5C. This product is more aligned towards the domestic demand of the customer as well as their buying power. As a part of the growth strategy, Apple needs to look beyond the core markets that are the United States, Europe as well as China (Morris 2014).
The main objective of Apple is to take the advantage of the increased dependency of technology. The current success of Apple has taken place as it has disrupted the tech market in order to innovate. As compared to the other companies, the imitating of the touch screen phones as well as the creation of tablets was quite difficult and as a result Microsoft purchased Nokia. However, in the case of Apple it is completely different. Apple consists of a unique organizational culture which is not closed and as a result, it encourages innovation and also the originality to flourish.
In the year 2007, Steve Jobs decided to alter the original screen of iPhone from plastic to glass just a month before its release. As a part of the strategic growth, it is very important to introduce new products for new customers. IPod is also a part of the growth strategy of Apple. IPod is a part of innovation and the product became hugely successful for Apple as it helped Apple to get exposed to more new customers (Corcoran 2014).
As per the growth strategy report, the revenue that has been derived by Apple from Apple Music to Apple Play is an amount of $19.9 billion. As per the reports, there are more than active 1 billion devices of Apple. Some of the individuals believe that the innovation of IPhone will help to bring more revenue for Apple.
In order to become more competitive, Apple has followed vertical integration as it owns chip manufacturers and it also controls the process of manufacturing. By introducing new products, Apple has faced subsequent growth. The most significant that has been incorporated by Apple is the innovation in IPhone. In the year 2008, iOS Apple Store was revealed which was incorporated with the iTunes Store in order to give a simple way to the users to download and buy the application. However, iPhone was completely transformed into a most important innovative platform for the developers. As a result, Google followed it and came out with the Android Store (Eaton et al. 2015).
Figure: The Up gradation of IPhone
(Source: Above Avalon, 2015)
The diagram shows the up gradation cycle of the iPhone product of Apple. Apple was also to innovated Siri, a voice-enabled assistance which was followed by Cortana of Microsoft. Apple helped to open the door for the voice enabled apps in the world of computing.
Invention is the creation of a good or it is the introduction of a process for the first time. However, innovation takes place when an individual makes a noteworthy contribution to a thing that has already been invented. The two words “invention and innovation” are often used by everyone interchangeably. As a result, the individual overlooks or neglects few main delicacies in meaning that changes the conversation (Bhasin, 2016).
There are few examples that can demonstrate the fact that Apple qualifies as an innovator:
Mouse – Mouse was invented much before the invention of Apple, however, it represents a technological innovation that has been performed by Apple. The world of computing was changed by Apple with the innovation that it created by introducing Mac.
Laptop track pads – Way back in the 1990s, the computers used bulky trackballs as the main mechanism of input. However, with the innovation of PowerBook 500 notebooks, the scenario of the laptops changed.
The two words are completely different where invention is about producing something new and innovation initiates the concept of use of an idea or technique. In order to differentiate between invention and innovation we can take the case study of IPhone. IPhone is a part of innovation as innovation is genius whereas invention is easy. IPhone is created ecology of media content, certification, claim, development and it is combined under one roof. Though IPhone was invented, it is a genius invention that changed the world of technology and is thus categorized under innovation. There are very few inventions which becomes a successful innovation (Walker, 2015).
Figure: Innovation versus Invention
(Source: IMENCA 2015)
The transformation of a company from invention to innovation does not indulge a huge investment or an enormous reformation. There are many companies which declare themselves as the leader in innovation as they show big loads of patents as a proof of innovation. However, patent is the part of invention and as a result invention is not equal to innovation. The patents which are not used are not a part of innovation.
Innovation does not deal with events or any person; it mainly deals with examining the thoughts, processes as well as inventions. Invention is often considered as the first step of innovation. Innovation mainly deals with the fact that the individuals are convinced to alter their material as well as the academic habit (Edwards 2016).
Innovation is a type of creative act in economics that requires a business attitude. There is mainly five generation of the innovation process model. The technology push model is a part of the innovation process. Under this model, innovation is acknowledged as a linear procedure with research as well as development and also the production of new triumphant commodities.
Figure: The Linear Technology push model
(Source: Created by Author)
The second generation model of innovation is the market pull model. The formation of this model was mainly due to the needs of the market which was in turn represented by the linear organization of the individual stages (Kim and Kim 2015).
Figure: The market-pull model
(Source: Created by Author)
With the help of the Stage-gate innovation process, Apple will be able to manage new product innovation excellence. The innovative, widely implemented procedure skillfully incorporates many performance-driving practices into an easy-to-understand formula for success. The Stage-gate innovation process is mainly a conceptual and an operational road map that helps to move the new-product project from idea to launch (Cooper 2014).
The five stages that are involved in the stage gate model are as follows:
A company mainly takes up the new product development when the company tries to introduce new products in the market.
Idea Generation – The idea generation involves the Research and Development as it is the formal department of Apple that helps Apple to generate ideas. The research done by R&D is mainly done for the plan of Apple. As per the report, Apple can use the brain of the employees to generate the ideas. The customers are the oxygen of the company and the workers are the heart. The customers are the most vital source in order to get new ideas related to product development. The distributor and supplier also play an important role as they help to generate ideas (Gopalakrishnan et al. 2015).
Idea screening – In the case of Apple, idea screening is used to evaluate the ideas of innovative products. This criterion will help to determine compatibility with the aim of overall trade. The company categorizes the ideas into three forms that are marginal ideas, promising ideas and rejects.
Concept testing – Concept testing is the process of assessing the response of the consumer to an idea before the introduction of a product in a market. Concept testing is used as it recognizes the desires, perception as well as wants of a commodity. Concept testing provides Apple with the imminent for designing a visual product (Colombo et al. 2015).
Concept development and Testing – This step helps Apple to develop attractive ideas and there is more than one likely product that can be created by Apple. Once Apple has become successful with the development of the concepts, the concept needs to be tested with the help of the customers either physically or symbolically.
Test marketing – If the product of Apple becomes successful in passing the functional tests, the next step that is involved in the NPD process is test marketing. Test marketing will give Apple an opportunity to squeeze the marketing mix before the going into the expenditure of a product launch.
Commercialization – Under commercialization, the new product development of Apple will go conventional. At this point, the consumers will start purchasing the products of Apple. At this stage, the product of Apple will be launched across the target market that is in turn backed by the proper marketing plan.
Conclusion
Innovation is defined as the commercialization of ideas that provides economic benefit to the industry. The industries need to have a clear understanding about innovation in order to become successful. IPod is also a part of the growth strategy of Apple. IPod is a part of innovation and the product became hugely successful for Apple as it helped Apple to get exposed to more new customers.
References
Above Avalon. (2015). Apple’s Strategy for Growing iPhone Sales by 50% in Three Years. [online] Available at: https://www.aboveavalon.com/notes/2015/2/11/apples-strategy-for-growing-iphone-sales-by-50-in-three-years [Accessed 4 Jul. 2016].
Bhasin, K, 2016, This Is The Difference Between ‘Invention’ And ‘Innovation’. Business Insider. Available at: https://www.businessinsider.com/this-is-the-difference-between-invention-and-innovation-2012-4?IR=T [Accessed 25 Jun. 2016].
Colombo, G., Dell’Era, C. and Frattini, F., 2015. Exploring the contribution of innovation intermediaries to the new product development (NPD) process: a typology and an empirical study. R&D Management, 45(2), pp.126-146.
Cooper, R.G., 2014. What’s Next?: After Stage-Gate. Research-Technology Management, 57(1), pp.20-31.
Corcoran, P., 2014. The Innovations and Inventions of Steve Jobs [IP Corner]. IEEE Consumer Electronics Magazine, 3(2), pp.46-57.
Eaton, B., Elaluf-Calderwood, S., Sorensen, C. and Yoo, Y., 2015. Distributed tuning of boundary resources: the case of Apple’s iOS service system. Mis Quarterly, 39(1), pp.217-243.
Edwards, A, 2016, What Is the Difference Between Invention and Innovation?. Anne Edwards.
Gopalakrishnan, M., Libby, T., Samuels, J.A. and Swenson, D., 2015. The effect of cost goal specificity and new product development process on cost reduction performance. Accounting, Organizations and Society, 42, pp.1-11.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases: competitiveness and globalization. Cengage Learning.
Khan, U.A., Alam, M.N. and Alam, S., 2015. A Critical Analysis of Internal and External Environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), pp.955-961.
Kim, G. and Kim, S, 2015, Applying Need Pull and Technology Push Theory to Organizational Information Security Management. International Business Management, 9(4), pp.524-531.
Morris, K., 2014. A Beginner’s Guide to iPhone 6 and iPhone 6 Plus: Or iPhone 4s, iPhone 5, iPhone 5c, iPhone 5s with iOS 8. Gadchick.
Power, J, 2016, The Evolution of Innovation Framework Models.] Ipacso.eu. Available at: https://ipacso.eu/innovation-modelling/innovation-model-analysis/187-the-evolution-of-innovation-framework-models.html [Accessed 25 Jun. 2016].
Tidd, J, 2016, Innovation Models. Joe Tidd.
Walker, B, 2015, Innovation vs. Invention: Make the Leap and Reap the Rewards. WIRED. Available at: https://www.wired.com/insights/2015/01/innovation-vs-invention/ [Accessed 25 Jun. 2016].
Žižlavsky, 2013, Available at: https://cdn.intechopen.com/pdfs-wm/45701.pdf [Accessed 25 Jun. 2016].
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