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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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