Group Assignment Case 3 - Apple Inc. Keeping The I in Innovation

Case 3 Course Syndicate 3
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Apple Inc.:Keeping the I in Innovation, Case #2 Business Strategy Maria Benedicta (29111447) Hermanto (29111471) Shah Reza Dwiputra (29111482) Pungky Hermawan (29111455)
1. CASE SYNOPSIS Apple Inc. is the undisputed leader among technology companies for creating products that border on art. They create products that are not only a delight to use but also provide a strong visual and emotional attraction. Apples focus on innovation has helped it maintain a competitive advantage and marketing prowess over other industry players that have historically been much stronger than Apple Founded in 1976 as a computer-business company, much of Apples success has been attributed to its music- and video-related products, in addition to the iPhone. Nowadays, Apple business is covering some products such as: Computer / Laptop (The iMac & MacBook), Digital Music Player (The iPod series), Smartphone (The iPhone series), Internet video (The Apple TV), Tablet computer (The iPad series), and Digital contain store (The iTunes store). As of September 2010, iPhone is the main revenue generator and followed by iMac/MacBook, iPod, iPad, and others. Steve Jobs, the CEO of Apple Inc., is the man behind Apples success story through his leadership and innovation ideas. With a unique ability to visualize innovative product designs and predict what people would like to have, Jobs is known to be obsessive about process and detail. He has kept Apple focused on just a few products that have the potential for high return. He routinely sends products back to the lab and insists that Apple must build the best products. No product hits the market unless it meets his exacting
standards. Steve Jobs has led Apple in an unprecedented run of successful products and services that have disrupted the music, mobile phone, media, and video game industries. Although Apple Inc. has become the market leader in its industry, it doesnt mean they are in the Blue Ocean area. Many competitors are ready to beat Apple with their strategy.
Table 1. Existing Competitors
2. ISSUES / PROBLEMS IDENTIFICATION Competition in technology-based industry is very tough. The survivors are companies who can keep the innovation wheel rolling and fulfilling what customers want.
On January 17, 2011, Apple was faced with an additional challenge when Steve Jobs handed control of the company to chief operating officer Timothy D. Cook, with the announcement of another medical leave. Although Cook has experiences in managing Apple Inc. during Jobs previous two absences, Jobs has remained involved in all major strategic decisions; thus Cook has not yet been completely tested in the CEO role. There is a big question on this situation: Will Apple survives without Steve Jobs? What happens to a modern company whose innovations and inspirations are so closely tied to the vision of one leader when that leaders influence is in decline?
3. CASE ANALYSIS To understand how Apple became a leader in innovation and its strategy to win the competition, we will use Porters Value Chain Analysis to find their value in order to survive in competition even though Steve Jobs is or will no longer involve in strategic decisions.
A value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver something valuable (product or service). The activities contained within the value chain are classified as Primary activities and support activities.
Support Activities
Primary Activities
Figure 1. Apples Value Chain
4. CONCLUSION & RECOMMENDATIONS The future of gadget business will be promising as gadget will become a life style. Thus, the demand will be increasing. Other company will try to do their best in order to grab this opportunity by releasing many products to the market. As a result customers will be more selective to the product which really understands to what they expect.
Although Apple will continue to face challenges as the company adjusts to operating without Steve Jobs, based on the value chain analysis above, we are confident that Apple will survive from the competition as long as they keep maintaining and do improvement on their core competence which is INNOVATION so they can offer something different to their customers.
5. LESSONS LEARNED Apple Inc.s strategy can be adapted in other industry. Nowadays, the competition is very tough. Size does not always matter. To win the competition, we may consider the strategy we have learned from Apple Inc. as follows: Understand your strength and weakness Innovation should be embedded both in Primary and Support activity Innovation distinguishes between a leader and a follower as well as the winner and the loser Always listen to what your costumer wants as one of your innovations goal
REFERENCES Henry, Anthony E (2011) Understanding Strategic Management, Oxford University press, 2011

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Case 3 Course Syndicate 3

Table 1. Existing Competitors

Figure 1. Apples Value Chain

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