CASE STUDY: INNOVATION AT APPLE

Apple is identified as numero uno for its unique products and brand image. Every Apple user reveal an emotional relation between consumers and Apple products, touching every I product created in the past two decades. In every single way Apple is an inevitable part of their daily life. The growth of Apple as a seed to its current glory can be attributed to its survival in the critical times between 1985 and 1997 which has been backed by two major factors Innovation and Steve Jobs.

When Steve Jobs returned to Apple after being fired, the company share was only worth US

$5, and its future was uncertain. Today, in 2020, Apples share price is around US $278, and the company achieved revenues of US $260.17 billion in 2019.

This mini case highlights the role that design thinking , creativity and innovation has played in Apple .

The Hard Times at Apple

The early days of Apple (which was cofounded by Steve Jobs on 1976) was through the first personal computer that was delivered with Apple OS as Apple was the only or there were no other manufacturers of this type of computer that were used only by governments or large companies|. In 1985, Steve Jobs was forced to leave the company, which marked the start of a chaotic era in the companys strategy and product development.

In the period 1985-1997, Apple struggled to achieve market success, especially after Jobss departure and increasing competition from other giants such as IBM, which decided to enter the PC computers market. During this period, Apple faced number of challenges including:

• Unstable strategy due to the change of executive teams
• Unclear vision about Apples competitive strategy, especially after IBM entered the PC market which was competitive
• Unclear vision about selling OS licenses, which would put the company in competition with Windows operating system
• Large number of failed products (such as Newton PDA) and few successful ones (such as PowerBook)
• Products not unique in the market and
• Confusion and uncertainty among Apple consumers, resulting from this strategy

Design Thinking to Fuel Innovation

Apple is a major example in the field of innovation that excelled by adopting design thinking. Design thinking is a solution-oriented process that is used to achieve innovation with considerations about the consumer at the heart of all development stages. Tim Brown, president and CEO of IDEO, defines design thinking as follows: Design thinking is a human- centered approach to innovation that draws from the designers toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.

Most people make the mistake of thinking design is what it looks like. People think its this veneer that the designers are handed this box and told, Make it look good! Thats not what we think design is. Its not just what it looks like and feels like. Design is how it works. Steve Jobs

Most of the design thinking models share the target of achieving innovation through three main factors:

1. User Desirability. The product should satisfy the consumers needs by solving everyday problems through a user-centered process which requires a deep understanding of the user and through an empathic design process or in simple- putting ourselves in the shoes of our consumers (using tools such as an empathic persona map).
2. Market Viability. Successful products require an integrated marketing strategy that identifies the target segment and builds the product brand in accordance with this target segment. Tools such as the business model canvas can help our understanding of the project and create a business strategy for it. SWOT analysis in addition ,allows us to understand the strengths, weaknesses, opportunities, and threats of the specified product.
3. Technology Possibility. Technology provides state-of-art tools for designers to innovate and build products that meet todays needs. Technology should be adopted through the development process, including the prototyping stage where a visual presentation of the product is made to the team.

Think Different! Think Apple!

After Steve Jobs returned to Apple in 1997 (upon Apples acquisition NeXT), he started to apply the design thinking characteristics discussed above, which reflected his vision for Apple

products. The vision discussed below was used to form Apples strategy from 1997 until today. Steve Jobs applied design thinking by focusing on:

1. Peoples needs and desires, rather than only the needs of the business
2. Building empathy by helping people to love Apple products
3. The design rather than the engineering work; designers consider both the form and the function of the product
4. Building simple yet user-friendly products rather than complex hard-to-use products

The vision characterized above can be clearly identified in modern Apple products. Although other competitors focus on the features and product capabilities, Apple focuses on a holistic user experience. For example, the iMac is renowned for being quiet, having a quick wake-up, better sound, and a high-quality display. This vision was formed in Apples development strategy that includes:

• Excellence in Execution and Beauty

In this part, Steve tended to improve the execution process by closing 2 divisions, eliminating 70% of the new products and focusing on the higher potential products, reducing the product lines from 15 to just 3, and shutting facilities to move manufacturing outside the company. Apple also launched a website for direct sale of its products and started to take an interest in materials and how products are manufactured within a consumer-driven culture.

In addition to the function of the product, the form should beautiful, which can be achieved through continuous innovation and development. Apple also focused on the materials and manufacturing process and took a bold approach to trying new ideas rather than sticking with the ordinary design forms.

• Platform Strategy

Apple streamlined their product portfolio to a family of products that can be produced much more quickly while keeping the existing design elements. Also, the company targeted product that require less repair and maintenance.

• Iterative Customer Involvement

The consumer experience should be integrated into the design and development stages through participating in usability testing. Also, the design for interfaces should focus on the user experience.

CONCLUSION

Apples history with innovation provides a clear lesson about how design and innovation can turn company failure to market success and a leading position in a competitive market by core innovation placing their consumers at the heart of the process. The period that Steve Jobs was absent from Apple demonstrates that copying others and lacking a clear innovation strategy can lead companies directly from success to failure. On the other hand, innovation can definitely help build a successful business. [Case Source: Design Thinking: Innovation at Apple, Designorate, 2019 ]

QUESTIONS (40 MARKS)

Case question :Now that you have understood the growth of Apple Inc. and the power of innovation that has driven the organization to success, imagine that Apple Inc . has decided to invest its strengths into home appliance segment to which the organization would like to add franchising option to obtain maximum reach and to meet its direct competitors like Samsung and Panasonic and other competitors who have a strong hold over the Middle East market. You have taken over the role of Chief Executive Officer and you are required to,

1. (a) Assess the challenges faced by Apple before Steve Jobs returned to the organization and what steps were implemented to regain the control over global market? (5marks)

OR

(b) Describe the purpose of industry/target market feasibility analysis for Apple Inc., and identify the two primary issues that should be considered for Apple in the new initiative it has planned. What is the difference between the firm's industry and its target market?

2. As Apple Inc. has also identified franchising as an opportunity to penetrate into the Middle east market in the shortest span, explain what are the primary advantages and disadvantages to establishing a franchise system (from the franchisor's point of view)? (5 marks)

3. Briefly describe the four main components of the Barringer/Ireland Business Model Template and how they can be relevant to Apple Inc. in starting its new plan in home appliances segment? (5 marks)

4. Discuss the difference between a product and trademark franchise and a business format franchise? Which type of franchise is most common for entrepreneurial firms and how well can it be applied to Apple Inc.? (5 marks)

5. Considering current product portfolio and innovative strength of Apple Inc., devise two innovative products with their utility you would want Apple to develop under your creative leadership for the home appliance segment which confirms value. (8 marks)

6. Evaluate the 4-step innovation model. (4 marks)

7. Explain the types of stakeholders in a business environment and what strategies can be put in place to inform the plan of Apple Inc. to enter the home appliance segment to these stake holders. (8 marks)