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Introduction Apple's business strategy is in leveraging the unique ability in designing and development of own devices, software, and services in giving the consumers a range of new and usable products that effortlessly integrates, and have innovative designs (Apple Inc. 2020). There is continued investment in research and development as well as in marketing and advertising, which is critical in sales and developing of Apple's creative and innovative technologies. Apple continues expanding its platform for third-party application and content availability and delivery through iTunes Stores, which is part of the company's strategy (Johnson et al., 2012, p. 5). Through iBooks and App Store customers can download books and applications in their computers or even through iOS devices such as iPod touch, iPhone, and iPad. Through Mac App Store allows consumers can discover, effortlessly download, and install applications to their computers (Apple Inc. 2020). Apple also gives support to third-party hardware product development and digital content creation to boost to the company offers. Expansion of distribution networks is part of the firms strategy and aims at effective reaching more customers and offering them with quality services during and after (Johnson et al., 2012, p. 5) Case Study Organization and its Context and Environment History of Apple Inc. Apple Inc. was founded back in 1976 by Steve Jobs, Ron Wayne, and Steve Wozniak. Ron Wayne later left the company, but Jobs and Wozniak went on and designed Apple I like their first computer and presented it to HP (Hewlett Packard). HP was not impressed with the design and opted to pursue the venture, but this did not discourage Jobs and Wozniak in designing and selling computers (Johnson et al., 2012, p.1). Apple II was introduced in 1978, and it recorded sales of up to 3500 computers in 1979 and up to 78000 computers in 1980. By 1980, the company had employed more than 1000 employees, and it decided to go public offering stock to the general public (Johnson et al., 2012, p. 1). Apple's new versions of the Macintosh and new markets in-office computers led to good sales in the 1980s and 1990s. Apple introduced the Macintosh computer in 1984, and it recorded sales of up to 70000 computers as soon as it was available in the market (Aljafari, 2016, p.3). After the introduction of the Macintosh, Apple went into a major power struggle between the executives, which eventually led to the exit of some executives, including Steve Jobs. The exit of the company leadership and decline in sales led to a monetary loss in Apple in the mid-1990s whose main cause was lack of order fulfillment for the Power Macintosh computers (Johnson et al., 2012, p. 1) Steve Jobs returned to the company in 1997 as an advisor when Apple bought his new company NeXT Inc. He went on to become Apple's CEO and introduced the iMacs, which recorded sales of up to 800000 computers in 1998, and from this point, Apple did excellently. Jobs steered Apple towards the introduction of new and innovative products each at a time. The iPod was introduced in 2001, the iPhone in 2007, iTunes in 2008, the iPad in 2010 (Aljafari, 2016, p. 4). Apple continuously moves on with the introduction of innovative new products as well as versions of their products, including the iPhone series. The innovations have seen Apple move
up in sales over the years to the point of being considered the best company in the world with the most preferred products (Satell, 2013). Apple’s Business Strategy in Innovation and Technological Change Apple's business strategy is in leveraging the unique ability in designing and development of own devices, software, and services in giving the consumers a range of new and usable products that effortlessly integrates, and have innovative designs (Apple Inc. 2020). There is continued investment in research and development as well as in marketing and advertising, which is critical in sales and developing of Apple's creative and innovative technologies. Apple continues expanding its platform for third-party application and content availability and delivery through iTunes Stores, which is part of the company's strategy (Johnson et al., 2012, p. 5). Through iBooks and App Store customers can download books and applications in their computers or even through iOS devices such as iPod touch, iPhone, and iPad. Through Mac App Store allows consumers can discover, effortlessly download, and install applications to their computers (Apple Inc. 2020). Apple also gives support to third-party hardware product development and digital content creation to boost to the company offers. Expansion of distribution networks is part of the firms strategy and aims at effective reaching more customers and offering them with quality services during and after (Johnson et al., 2012, p. 5) Apple’s External and Internal Environment Strength analysis on Apple shows its major strength is its recognition as the leading innovator in the tech industry being the producer of the most preferred devices. Creativity and innovation in Apple has seen increased investment into the company for the past five years. In addition Apple has strategically placed its sales towards high traffic locations which have a direct contribution to the company’s revenue. Apple weakness is in the company’s strategy in promoting direct sales which are still lacking (Khan et al., 2015). Externally, Apple is faced by political problem when it comes to diversifying its business outside the boundaries of United States. The China-US trade war has seen led Apple into an outsourcing problem as it majorly outsourced manufacturing from China. Apple as also in the recent times suffered economically due to the China-America trade war that has created an economic standstill across the world. Socially, Apple has throughout bee focused in designing and development of products that satisfy the customers and in the process has acquired and partnered with a lot firms. Technologically, Apple has remained as the pacesetter in terms of technological innovation through aggressive innovative strategy (Khan et al, 2015). Potter’s Five Forces Analysis Rivalry among competing companies: Apple’s tech-based products portfolio is well-diversified software and hardware globally which is a tough decision. Apple is experiencing rivalry across the world which is leading to sales growth as well as loss of market share. However, Apple remains at the top of the competition as it has a user friendly, simple and small product line thus less confusion of customer. The high differentiation of Apple products from competitors is another key factor. Apple is also able to strategically position its products via strong distribution channels such as Amazon (Khan et al, 2015). (High)
Potential entry of new competitors: Apple focuses on selling their products to the high income earners making it difficult for new entrants in gaining market share. Also, Apple outsources manufacturing thus cutting down cost and expenses and evading social responsibility making the company more profitable and corporate capitalization. In addition, high switching cost, patents and copyright plays part in lowering the threat (Khan et al. 2015). (Low) Competitive pressure from substitute products: There are series of substitute products for nearly all Apple products include Samsung Galaxy, Samsung Note, Nokia, Sony Erickson and HTC for the iPhone, Samsung Tab for the iPad, Samsung and Sony MP3 players for the iPod. There is also competition to Apple OS and Apple store from Android OS and Play Store. There is however low competition for iTunes and iCloud (Khan et al. 2015). (Moderately High) Bargaining power of the supplier: The manufacture of Apple products is unique giving the suppliers a low bargaining power. Also, Apple outsources its manufacturing from different suppliers and buys in large quantities giving the company a higher buying power (Khan et al. 2015). (Moderately Low) Bargaining Power of the customers: Apple distinguishes itself as the leading innovator, and the continued investment o quality, helps the company in retaining its customers. Apple is also able to switch competitor customers towards its products (Khan et al., 2015). Analysis of Change and Change Management Approach According to Lewin’s change model, change in an organization begins with the preparation of the organization in accepting and embarrassing change. This includes challenging the behaviors, attitudes, values, and attitudes that define an organization. The second step in change involves effecting the change itself, which should be accompanied by proactive involvement of people in embracing the new direction. The organization has to communicate the benefits of the change for its success actively. The final step involves normalizing the organization into the new change and adapting the change as a new way of life. It means the change should be used all the time, and it is incorporated into the business strategy, vision, mission, and values (Burnes and Cooke, 2012, p. 412-417). In reflection to Apple, the company is in a continuous change process as it is built on a constant change process in terms of adopting new technologies and ideas in the designing and development of their products. The three steps in Lewin’s change model are, therefore, in the constant and continuous application as far as the company is concerned. The Mckinsey 7s model is built on seven organization areas, which include strategy, structure, system, staff, skills, shared values, and style. Approaching change with this model begins with checking where the seven organization areas are not aligned. The optimal alignment organizational design is determined, the point where changes are required is agreed upon, and the desired changes are finally made (Najed et al., 2015, p.43-48). With Apple, the McKinsey 7s model does not have a direct application as the organization is built on a continuous change process through innovation. From its strategy, Apple is in a continuous change as it adopts new technologies now and then, the shared values are based on continuous change, the style of the company is continuous creation and implementation of new ideas, and the staffs are in a continuous process of learning new skills.
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John Kotter’s change model is established on eight steps that begin with the developing urgency to change. Forming of powerful collation is the next step and creating of the change’s vision and its communication follows as the third and fourth steps. Removing of barriers, creating of shortterm wins, building on the change, and change integration into the corporate culture follows, respectively (Rajan and Gansem, 2017, p. 182-183). Reflecting on Apple, the organization is built upon this Kotter’s change model. As a company that is in continuous change, the model is well aligned with the company's business strategy, which is enshrined in a continuous change process. The ADKAR change model is an acronym that denotes five concrete and tangible outcomes that originations have to achieve long-lasting change. The outcomes include the awareness of the need for change, the desire to supporting of change, knowledge on how to approach change, the ability to the demonstration of skills and behavior, and the reinforcement for effective and longlasting change (Kiani and Shah, 2011, p.80-82). Focusing on Apple, the company's approach to change is in alignment with the ADKAR change model. A comparison between the company's strategy and its performance over the years is concrete proof that the company has been able to achieve the ADKAR's outcomes to change. The Kubler-Ross change model is built on five stages. The first step is denial, where the employee or the employees in an organization might be in a state of shock or denial in accepting change. Second is anger, whose application in business refers to the realization of the gravity of the change and starts to fear what lies ahead. The third is bargaining when the employees realize that they must adapt to change, and they start to find ways on how they fit in the change. Fourth is the depression phase there the employees have learned, and most of the employees are not happy, and there are low energy and less excitement at the workplace. The final stage is acceptance, where everyone in the organization fully accepts and embraces the changes and starts to build on hopes and aspirations (Anastasia, 2015). Now focusing on Apple, looking into the company's history, there was a time the company was engulfed with problems, including leadership problems back in the 1990s. The Kubler-Ross change model fits this scenario as the company went through its steps, and employees accepted changes that have seen the company rise to be the best in the world. Gap(s) in Change Implementation Approach The task of change management is a challenging task as it requires the leadership to have a set of skills including people, business, analytical, system and political skills, and requires consultation with different sets of stakeholders (Hashim, 2013, p. 687) Apple has been able to rise to the ranks of being considered as the best company in the world solely due to its approach to change and innovation. As seen, the company's strategy is based on continuous change and the adoption of new innovations (Johnson, et al., 2012, p. 7). The organization is therefore set to face any type of change that it might face along the way as its culture is purely based on facing changes. The employees are set to cope with the change that comes with the pursuit of new and innovative technology, which has always been part and parcel of the organization. However, it’s typical for any change in organization to be faced with change resistance. Apple strategy makes it difficult for manifestation of change resistance in the company. Change resistance is avoided at all cost
through investment in change management where the employees as continuously trained in coping with the constant change in the company (Johnson et al., 2012, p. 8). With this strategy, Apple is likely to remain one of the greatest companies in the world as it is ready to face any change that might come along. Apple is able to outwit its closest competitors such as Microsoft, Samsung, and other tech companies mainly due to the innovative culture in the company, which is well evidenced by the annual release of new phones in the iPhone series (Aljafari, 2016, p. 422). Nangibi and Baban (2011 p. 544) states the main task in management today is leading a firm towards change main reason being the increased globalization, rapid technological innovation and deregulation. However constant change comes with a resistance especially from the employees. As time goes, employees tend to be comfortable with business process and they are reluctant to making of changes to the schedule (Aljohani, 2016, p. 321). It is common for employees to be disappointed by the aftermaths of change as it disrupts their familiarity with processes subjecting them to relearning of the basics. Apple as a company has faced some major changes in its history. First change came in 2011 when its Steve Jobs died and he was replaced by Tim Cook. The leadership change brought disruptions within the company including a change of the hierarchical organizational structure founded by Jobs. Change resistance manifested itself when the employees started to question Cook’s leadership competence. Cook was faced with the challenge of changing the power culture established by Jobs into a more proactive culture with more engagement of employees in creativity and initiatives and listening to the concerns from the lower employees. The employees viewed Cook as leader with no leadership skills and who could not match the qualities of Steve Jobs. Cook proved his leadership capability by adopting a task culture and communicating the important values in this culture to the stakeholders including the employees. He was able to overcome the resistance by acing as the agent of change and he took the role of formulation of organizational goal and redesigning the organizational structure (Doduvskyi, 2018). According to Hashim (2013, p. 686), the management’s success and benefiting from change depends on the leadership ability to create and maintain an effective environment that reduces change resistance from the employees and encourages support and acceptance to the change. Tim Cook was able to overcome change resistance in Apple solely because he took the change leadership role and then brought the employees on board through communication of the underlying values in accepting the change. The changes saw Apple transform into a culture of creativity and innovation which begins from the lowest employee levels. Recommendation From the analysis of innovation and change management in Apple, it has been seen that the company is working in the right direction. However, Apple needs to strengthen its change management approach and align its innovations with sustainability goals. The company needs to make sure that continuous innovation strategy does not pose risks to such things as the environment and exploitation of humans, as it has been recently linked to inhuman working conditions in China (Khan et al, 2015). The company, therefore, has to redefine its innovation strategy to see that it is within ethical standards in terms of sourcing of materials and treatment
of the employees in its affiliate companies that does the production. This might include the development of a guideline that will be adopted in the production of Apple products. In this way, the company will be in a position to operate without the risk of getting into the wrong side of the law, which might have a negative impact on the company's performance. Conclusion Apple has incorporated numerous concepts, theories, and iterations into its change management processes. The slow production rate and the implementation of Gemba Kaizen are both remarkable. Since its inception as a desktop computer, the iPod has undergone seemingly endless refinement in keeping with the Kaizen philosophy of continuous improvement (Simmons, 2018). Because of the iPod's success, Apple has expanded into new product categories and digital platforms, increasing the level of competition in the market. The corporation also has a firm grasp on how to bring new goods to market at a time when innovations are required to alter corporate governance and beyond. Concurrently, the firm builds its software and research products, making them accessible to clients while improving the quality of its services. Steve Jobs asserted following Apple's June makeover and release (Simmons, 2018) that Apple does not copy and that Microsoft uses third-party content. In contrast to businesses that accept the possibility of making mistakes, Apple does not re-release products if it changes its mind about something. It was important to Steve Jobs to hire more qualified workers for the company, to approve more qualified bids, and to hire more skilled workers from other companies. The company's most vital ingredients are excellent communication, cooperation, and collaboration. In addition, the business emphasizes research and mentoring to boost productivity. In 2001, Apple operated over 25 efficiently run marketing centres. In addition to highlighting customers, the company's marketing efforts use market segmentation, acquisitions, loyal clientele, and physical storefronts. In addition, the company employed and re-established relationships with select agencies to distribute its goods, cutting down on sales expenses and allowing for improved customer market agreements. It mitigates risk by dampening the influence of consumers' bargaining positions.
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