Introduction - Leading Innovation And Dynamic Perspectives
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The following report is focused on an analytical discussion, and argumentative where applicable, on the internal factors of a company to survive and lead in the external factors of its operating industry. In this context, the innovation leader in the field of technology, Apple Inc, has been taken as a platform to conduct the evaluative study. The strategy, structure and systems of the company will be outlined first, followed by its corporate best practices. Furthermore, the competitive market of the global consumer electronics industry will be analysed to understand ten key issues that are creating a challenge for the company in retaining its leading position. Alongside, the dynamic and changing nature and trends of the concerned market are to be outlined to further identify the factors that influence the company to make changes to its business.
1. Strategy, Structure and Systems
1.1 Strategy at Apple Inc
Product differentiation is Apple’s business strategy (Johnson et al, 2012). Particularly, the international technology company’s goods and services are distinguished by their simplicity and superior functionality. Apple’s business plan includes four components:
Product Design and Functionality
Apple has used enhanced product and service capabilities to gain a competitive edge (Tien, Van Dat and Chi, 2019). Apple’s breakthroughs include the iPad, the first tablet of its type that could hold thousands of songs and shuffle them. It has been argued that Apple’s competitive edge may not be long-lasting.
Improved Customer Service
Apple has successfully created a consumer experience that goes beyond product purchases. Customers unwrap the box, plug in the product, and begin using it. Everything they need is already there. Apple Stores in 25 countries and territories also play a role in this regard, as per Bender and Gronau (2021).
Boosting Apple’s Ecosystem
Apple devices and software work seamlessly together. Applications run on many Apple devices concurrently and have similar user interfaces (Bender and Gronau, 2021). Apple’s ecosystem makes it difficult for people to switch. The ecosystem also allows for leveraging current customer connections to provide new goods and services.
Less Reliance on iPhone Sales
Ahrendts left Apple, and Giannandrea was promoted to head of machine learning (ML) and artificial intelligence (AI), succeeding Bill Stasior as head of Siri (Broussard, 2019). Such high-profile appointments in less than three months illustrate the company’s focus on services and other business units to lessen dependency on iPhone sales.
1.2 Structure of Apple Inc
One way to think about the organisational structure is as a blueprint for how to accomplish the aims of a business. Rules, roles, and obligations may all be part of the activity. The organizational structure affects information flow inside a corporation as well. The five most popular organisational structures are hierarchical, networking, divisional, matrix, and team (D?wigo?, 2017). According to Pooja (2020), Apple’s organisational design is characterised as a “functional organisation”. Instead of focusing on particular items, the corporation has restructured itself around areas of competence. It is only after that that the final goods are developed by a multidisciplinary team. Apple is divided into specialised units. All of the divisions have their top executives and vice presidents.
Apple’s strong corporate control is a result of the expertise-focused hierarchical structure they have developed. Apple has a great deal of freedom among its many divisions, which has allowed it to consistently produce market-leading products. As per Pooja (2020), the fact that Apple’s corporate divisions are structured according to skill rather than product implies that each employee working for Apple has a specialised function with specialised responsibilities. All of the employees are doing their jobs following their own skill sets. Because of this, they can produce genuinely integrated products that Tim Cook has always been proud of.
1.3 Systems in Apple Inc
When it comes to a company’s systems, there has been a wide range of options in previous centuries, and this study will focus on identifying what those options are and how they have changed through time. When it comes to achieving success, according to Al-Mamary, Shamsuddin and Aziati (2014), Apple relies on its information system since it is used properly and at the lowest cost possible. Apple has a well-structured organisation that enables the corporation to fulfil its goals promptly. Apple’s success is largely due to its ability to provide timely information to its customers, which implies that time, is a vital aspect for the company. Apple turns a competitive disadvantage into a competitive advantage by virtualizing and establishing strong communication among its employees (Aljafari, 2016).
When it comes to innovative and creative products, Apple has satisfied its consumers by giving the best technology of all time to satisfy their needs and providing the best service possible. Some individuals believe that apple is a cause, while others believe that it is a business. Apple accepts both viewpoints. Customers’ satisfaction is measured manually by the Apple Company. 86 out of 100 in the 2016 American satisfaction survey may also help Apple gain competitive advantages (Barzani, 2020). Investing heavily in information technology is an important part of Apple’s success.
2. Corporate Best Practices in Apple Inc
2.1 Change at Apple Inc
Business work is changing at a quick pace, and no one can afford to be left behind. Companies that want to be leaders must adapt to the changing environment, or else they will be left behind. In the opinion of Barzani (2020), when it comes to innovation, Apple is renowned as a firm that strives to use resources in the most efficient manner possible to keep up with the times. Technology is influenced by the company’s strategy, and various kinds of organisational structures have varying effects on IT. Planning for IT use in every department is essential, and management planning must be flexible enough to accommodate the many perspectives of businesses.
2.2 Innovation and Creativity at Apple Inc
Companies such as Apple invest a lot of money in research and development to be creative and to let the consumer feel and see the distinction in the goods, as well as to affect the software and hardware as well as the company’s strategy. Until recently, they have been able to maintain and safeguard their competitive advantages by employing brilliant individuals who bring a variety of perspectives and fresh ideas to the table (Barzani, 2020). Apple has gained competitive advantages via the development and innovation of software and hardware, as well as by the ability to be both creative and inventive at the same time.
2.3 Leadership and Culture in Apple Inc
Businesses may make predictions using information system technology, which Steve Jobs made clear that before making a choice, leaders need not be sure they know everything. Leaders in Apple prefer employing management information system technology (Barzani, 2020). Steve Jobs’ leadership may be a vital component of organisational management in the wake of the IT industry’s outstanding achievements. With his democratic leadership style, Tim Cook encourages his employees to bring their best ideas to the table. In other words, it does not indicate that he delegated the responsibility of making choices to other leaders and managers. When he does not know what to do, he keeps his choices open, weighs them, and persuades others to do the same. The present CEO, on the other hand, is following the transformative leadership that has maintained and will keep the products safe from access to personal devices to gather data, as per Kim (2020).
Apple’s corporate culture makes it possible for human resources to support a range of strategic goals and objectives since the expanded business worldwide faces differences in a variety of cultures (Thao, 2017). It is important for a company’s ability to compete in the information technology, internet services, and consumer electronic goods sectors that its cultural attributes complement the company’s goal for innovation (Meyer, 2019). It is because of this business scenario that Apple Inc.’s corporate purpose and vision statements may be fulfilled even facing huge cultural diversity between countries, such as between the domestic market and Korean market (Thao, 2017). The company’s cultural traits have been enhanced under the leadership of Steve Jobs and Tim Cook, and the company’s commercial significance in many areas throughout the globe continues to be enhanced. As a tool for strategic management and business success, Apple develops its corporate culture.
3. Competitive Environment of Consumer Electronics Sector
Although Apple Inc is a leading figure in the worldwide consumer electronics sector, there are significant issues that emerge as the barrier to maintaining the competitive edge in the global market:
Declining Profitability
Keeping up with the pace set by Apple in recent years is the company’s greatest challenge. The corporation has limited tolerance for mistakes because of the high expectations of its shareholders. Despite Apple’s strict inventory control, it will still be impacted by supply shortages. Although net income enhancement from $55.26 billion towards $57.41 billion, the firm’s operating margin decreased from 24.6 to 24.1% (Vailshery, 2021; Johansson, 2021).
Law and Apple’s Monopolistic Outlook
On several fronts, Apple’s attempts to maintain profitability are being tested. Several countries have expressed worry about Apple’s ability to stifle competition because of its market dominance (Johansson, 2021). For Apple, antitrust law will be its biggest obstacle. In recent years, the corporation has come to be seen as a monopolist.
Rivalry Challenge
Competitors such as Google, BlackBerry and Dell are producing their products and solutions to compete with Apple (Johansson, 2021). Assessment of Apple’s strengths and weaknesses conducted by Li (2021) reveals that the severe competition in this market is characterised by aggressive price lowering and the ensuing downward stress on gross margins. In the short term, the $2tn brand seems to be keeping pace with the competition, but the items shown at the company’s April event will be critical in determining its long-term success.
The Bottom Line
When Steve Jobs was alive, Apple was able to innovate at such a rapid rate that it could consistently meet the high expectations of its core consumers (Lashinsky, 2015). Because of a weakening of its brand, Apple’s rivals will be able to keep their goods and service on par with Apple’s, eliminating the premium that Apple charges for them.
Leadership
Whether Tim Cook can take Apple to the top of the gadget market is a question that has to be answered (Lashinsky, 2015). The Apple Watch, the company’s most significant post-Jobs innovation, has failed to live up to Jobs’ vision for the company’s key goods. To maintain Apple’s reputation for innovative goods, a new kind of leadership may be needed.
No Longer Setting Agenda
Apple used to surprise its competitors, but now they respond within weeks. iPod music player (2001) received little attention from major rivals despite being described as “revolutionary” by Apple (Del Barrio, 2013). For example, it took two years for competitors to imitate the iPhone (2007). An immediate rival product appeared barely eight months after the release of the iPad (2010).
Tougher Competition
Because Apple was the clear example to follow, the competitors had no choice but to copy them. Leaders are always being copied (Del Barrio, 2013). When imitators quit copying, the issue occurs. Apple’s designs, storefronts, advertising, goods, and even product packaging have all been stolen by other companies. That is a positive indicator, to be sure. There are signs that other corporations are developing their models, which is a bad indication
Too Many Changes
Consumer demand and, more importantly, intense competition is both driving up the release frequency of new products. Just three months after a product is hailed as groundbreaking, a better one replaces it. Maps, plugs, operating systems, and the company’s launch schedules for new goods are all affected by these changes. Del Barrio (2013) opined that all of this undermines Apple’s reputation of stability and brings the company closer to the system fragmentation it often condemns.
Lags Behind in a Connected World
There is no point in a system, which only communicates with other devices of the same brand if the future lies in the “internet of things” (IoT). An open system with everything connected to everything else is essential. Apple may have a hard time competing with companies such as LG, Sony, and Samsung, which produce cameras, refrigerators, washing machines, and television sets since Apple do not produce household appliances or cameras (Pooja, 2020). This is an area where Android has the upper hand over iOS. Xiaomi is a new player in this aspect since the company is an affordable option for consumers of mobile, TV, smart band etc. in countries like India (Sun and Fah, 2020).
Varied Spectrum of Competition
When it comes to the best-selling smartphone, Apple might easily surpass Samsung, but it cannot compete with competitors who make phones or tablets that are much less expensive. If a company wants to compete at the top end of the pricing range with big profit margins and compete with firms that offer products at a loss, it is difficult to do so.
4. Dynamic and Changing Nature of Competitive Environment of Consumer Electronics Sector
Business environment review is crucial in assuring a company’s sustainability, competitiveness, and profitability. Apple’s iTunes, iPhone applications, and iPad apps provide the corporation with a competitive edge over its competitors since the company can establish a barrier for its rivals by distributing the goods. As an example, this technique helped Apple Inc. become the first firm in the world to provide online music services via its innovative iPod and iTunes devices. Thus, the following are the changing nature and dynamic trends in the competitive environment of the consumer electronics industry:
There has been a rise in consumer expenditure on technology like laptops and other work-at-home equipment that have become more commonplace. Demand for class-related consumer devices will increase as more individuals work from home, which will lead to a rise in sales. 461 billion US dollars is expected to be spent on technology retail this year (GTMC, 2021). In 2021, the demand for technological items is expected to be comparable to that seen in the last months of 2020. Between 2020 and 2026, the consumer electronics industry is predicted to increase at a compound annual growth rate of more than 7%. The consumer electronics industry continues to spend in research and development of new goods, such as smartphones, smart wearable devices, and household appliances.
Increasing Internet access and service penetration in many established and emerging nations throughout the globe has provided substantial development potential for the consumer electronics industry. Market statistics from the “China Internet Network Information Center” shows that Internet penetration increased by 1.6% to 61.2% in 2019. Currently, the UK has 62.9 million active Internet users (CNNIC, 2019; GTMC, 2021). The use of micro-LED technology in TVs and huge screens is likely to grow the market for audio and video consumer electronics goods in the next few years. Market leaders are putting a lot of money into developing this technology to fulfil the huge demand from consumers.
Short product life cycles and rising product varieties represent a significant impediment to the expansion of the consumer electronics sector. This has resulted in a dramatic shortening of the product life cycle of consumer electronic items, such as smartphones, televisions, and cameras. Manufacturers have the issue of reducing product development time and time to market to compete in a highly competitive industry. There has been a negative impact on consumer electronics since the fast proliferation of COVID-19. Factors including supply chain and logistical delays, acute shortages of raw materials and other issues are limiting the manufacturing capacity for consumer electronics makers. Samsung, Apple, and LG have halted manufacture in several countries, including India, Malaysia, and China, to comply with local laws. When it comes to market trends, experts predict that everything will get back on track in Q1 of 2021.
A consumer electronics product is utilised in everyday consumer activities. Consumer electrical devices are made all over the globe, with a concentration in China and other low-cost nations (CNNIC, 2019). This year’s most significant technical innovations will play a vital part in integrating the digital and physical worlds as we embrace the digital revolution in 2021. To put it another way: these worlds have unexpectedly shifted the everyday life patterns from working at home to staying in contact with other individuals, and even healing ailments. These tendencies will continue to drive the growth of the technology sector. With a value of $1 trillion, Global Industry Insights estimates the consumer technology market in 2019. Between 2020 and 2026, the “compound annual growth rate” (CAGR) is predicted to reach 7% (GTMC, 2021). This is mostly owing to the fast expansion of Internet connectivity and globalisation. Service providers come from both developed and underdeveloped countries.
5. Factors Influencing Change in Apple Inc
5.1 Drivers for Change
There have been pandemics before COVID-19, but this one has taken an unparalleled toll on the world’s economy and cultures (Cohan, 2020). The epidemic is changing the way people own and use their devices at a time when digitalization is accelerating. When COVID-19 first emerged, health and wellbeing were the top concerns of customers. Masks, air purifiers, wearable sensors, and other smart health equipment are all expected by the market. In addition, the utilisation of speech technology and equipment allows for non-contact engagement, making it easier to utilise this equipment. Besides, the economic catastrophe that the world faced since the pandemic started has pushed global companies to rethink their roles in the economy. Another big trend driving change in the consumer electronics sector is that of technology advancements, as well as consumer-centricity (Zhang et al, 2019). The final two trends have been on the radar for a long time, but COVID-19 is accelerating them significantly.
5.2 Impact of the Factors
Apple announced in March of 2020 a new screening tool and information to assist consumers to remain educated and take the necessary actions in protecting their health. App and website users may utilise the COVID-19 app and website to complete a series of questions about their risk factors, recent exposure, and symptoms (Apple Inc, 2020). Frequently asked topics will be addressed, such as who is most at risk and how to spot the signs, in this section.
Apple has also released COVID-specific features in their operating system. When a user is wearing a mask, access to the passcode field on devices equipped with Face ID is made faster with iOS 13.5 (ET Online, 2021). The Exposure Notification API is compatible with Covid-19 contact tracking programmes developed by public health agencies. The phrase “exposure notifications” refers to warnings that users get on their phones if they’ve been exposed to a person who’s been tested positive for COVID-19 or is extremely likely to be.
In 2021, the University of California in Irvine and Anthem will collaborate with Apple to study how long-term monitoring of blood oxygen levels and other physiological signs might help manage and treat asthma (Apple Inc, 2021). This study, called the “Seattle Flu Study”, will investigate whether signals from Apple Watch applications can be used to detect early indicators of respiratory illnesses such as influenza. As part of the collaboration, Apple and researchers will perform three health studies, one of which will make use of the Apple Watch to investigate how blood oxygen levels may be utilised in future health apps.
Teachers and students across the globe have been adapting their lives to remote learning over the last year as classrooms and kitchens become classrooms. With the support of Apple technology, teachers have found new methods of teaching and learning that help their pupils succeed. A virtual graduation ceremony, an online high school musical, and iMovie and GarageBand-based history lessons are just some of the unique teaching methods that educators throughout the world have developed (Apple Inc, 2021).
An incremental $430 billion in investment in the United States is expected to create 20,000 employments by 2021, according to an announcement by Apple in 2021. Apple set a five-year contribution goal of $350 billion in the United States in 2018, which it has already surpassed by a wide margin in the previous three years. Apple plans to enhance its contribution to American innovation and the economy by 20% over the next five years. These funds will be used to build next-generation silicon and 5G technology in 9 US states.
Conclusion and Recommendations
Several Apple products have failed or become outdated within months after their debut. Because of the brand’s popularity, Apple retains a significant portion of the market. It is much easier for follower businesses to trust a certain organisation’s approaches if they are already familiar with that brand. If businesses are serious about making their impact in this industry, they will have to put in the time and effort to do this. Despite its leading position as an innovative industry player, Apply is facing high competition in the global consumer electronics market.
To maintain its position at the top of the consumer electronics industry, Apple must focus on a few key areas. For example, fresh and innovative features are required, as well as a focus on infrastructure. Saturation has reached key client sectors, such as smartphone and laptop manufacturing, yet customers’ desire for new products is gradually increasing (Rossato and Castellani, 2020). Those that come up with a new digital product or service will be noticed and attract new consumers. There has been an increase in consumer interest in tethered electronics linked to other gadgets they use often. That is why Siri controls a smart fridge, while an electric automobile and smart house management are all linked together. This is compounded by the absence of universal connection standards and compatibility in the IoT space. Another piece of advice for Apple Inc. is to incorporate disruptive technology into the heart of its business model (Tom and KK, 2021). High-margin goods are made possible by the development of new semiconductors, 5G telecommunications equipment, artificial intelligence (AI), and machine learning (ML). 5G networks, edge computing, new processors, and so on all play a role in the current consumer electronics trends. By carefully planning their investments and adopting the correct combination of technologies, firms can keep up with the competition.
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