Innovation and Risk Management
Introduction
Strategic growth is an essential element of increasing business activity and profits. There are a number of possible ways through which strategic growth can be achieved by an organization. One of the best ways to achieve strategic growth is to introduce a new product in the existing range of products. The new product should be unique and better or complimentary to the existing range of products. The organisation chosen for this study is Apple Inc. and a New Product Development (NPD) process is included in the report while covering the strategic growth of the company.
Apple Inc. is a highly innovative company that has captured large markets around the globe in the smartphone and laptop / computer industries. The company has always brought innovative products to its customers through sleek design and user-friendly features. The company has a large range of products to cater to the needs of a large variety of customers.
There are three major categories of a range of products of Apple Inc. These categories include hardware, software, and services as follows:-
Hardware
There are a large variety of hardware products of Apple Inc. in the field of smartphones and laptop/computers. Following are the computer models produced and sold by Apple Inc. :-
iMac
MacBook
Mac Mini
MacPro
MacBook Air
MacBook Pro
There are also various iPod portable-type digital media players produced and sold by Apple Inc. these include iPod Shuffle, iPod Touch, and iPod Nano.
The most profitable and market capturing range of products of the company includes its smartphones which are known as iPhones. Following are various versions of iPhones in reverse chronological order of their release :-
iPhone 6s Plus
iPhone 6s
iPhone 5C
iPhone 5s
iPhone 5
iPhone 4
iPhone 3G
Other than the smartphones of Apple Inc., the company also has successful tablets that are known as iPads. Following are various versions of iPad in reverse chronological order of their release :-
iPad Pro
iPad Air
iPad Mini
iPad
There are few other product varieties produced and sold by Apple Inc. which include Apple TV , various computer accessories, and Apple Watch .
Software
Apple Inc. also produces a variety of software products for its hardware products as well as common use by other customers. The company produces an operating system under the name of iOS and OS X. The company also produces a special media player named as iTunes. The company has developed its own web browser with the name of Safari. The company is involved in developing and selling iLife and iWork both of which relate to productivity and creativity boost and management .
Services
Apple Inc. has also started offering various services including iTunes Music Store, App Store (for iOS and Mac), iCloud and Apple SIM (i.e. SIM card for the iPad users .
How is Apple Inc. innovative?
Innovation in any company’s product is carried out by its designers. The designers at Apple Inc. are treated as royalties. They are given all the perks and privileges that anyone at another company can only imagine. The designers at Apple Inc. are provided with all the resources they require. There is no financial or resources limitation on them. The designers at the company have no reporting channel to the middle management and they are not required to get in touch with the finance department regarding the economic feasibility of a process or product. All the departments are required to conform to the instructions of the design department including finance, manufacturing, and sales departments. Other companies follow the opposite of it where the design department is required to conform to the instructions of the other departments. The design department of Apple Inc. creates the vision of the company’s future products. Apple Inc. has an industrial design studio that functions as the womb of every single product of the company. The product under development at this studio is available to only certain people in very small number in order to maintain secrecy of the project.
Apple Inc.’s Strategy
Apple calls its product strategy as “great product” strategy. It is proven that with the use of this strategy, Apple brought best products into the market. It maintains its high quality of products, make them simple and user-friendly. Whereas, other product makers mostly produce their product with packed features to give them impressive look. Although they look impressive, however, their strategy makes the product difficult to operate and more complicated.
Packaging is an important area for attractive marketing of a product and Apple is also leading in this area with a comparison to its competitors. The overall reputation of Apple in this area is that it provides simple, clean and functional packaging. Additionally, it gives its products utilitarian purpose, aesthetic sense as well while doing this they neither make the packaging plain nor too flashy.
The strategy of “great product” of Apple prefers Quality viz-a-viz Quantity. Whereas, the strategy of others companies is based on “to produce new products in a short interval of time one after the other” to occupy a large share of the market and to broaden their product range. On the contrary, Apple strategy’s central point is “selected products” with persistent improvement in the same product and it sticks to the best and does not branch out product within the same category.
If we look to the indicators of the market, which illustrate the market share, such as unit sales, then it is observed that companies, for example, Samsung, are occupying a bigger market share. But these indicators do not disappoint, Apple, as its main target is to make and to provide top quality products to its loyal customers and with the help of these customers it is branded as a top quality company although its market share is very small in comparison to other companies .
As inventory levels costs a company, therefore, Apple’s inventory level is very low and it costs the company very seldom. Not only does Apple maximize its profit margins by low inventory, but it also has a streamline manufacturing process with very low frequency of errors as well as continuous improvement in the system and adaptations to the new and efficient system. Top management is responsible for removing wastages in the system and therefore its profit margin is high, for example, CEO of Apple is not only directly responsible for continued optimization in the manufacturing process, but he also is responsible for introducing those techniques which are directly related to Apple products.
Apple brought specific optimization to its products i.e iPad, iMac and iPod touch. iPad was optimized with storage bump so it competes with other devices present in the market, for example, Surface devices and the target customers were enterprise users. In the case of iMac, reviewers pointed out big failing of iMac viz-a-viz with previous generations, Apple addressed this failing and here again, the target customers were business users. In the case of iPod touch, optimization was carried out in the supply chain and creation of ease for the developers. The supply chain was simplified and ease was created for developers so that the developers optimized screen sizes designs .
Main Components of New Product Development Process in Apple Inc.
Establishing Product Team
The company has to organize a team and separate it from the other sections of the company as soon as a decision about the new sensitive product is finalized. The team is separated from the rest of the company, to provide them freedom of work, either by confidential agreements or through physical barriers. The team is directly responsible for Executive Team (ET) of the company and does not report to the routine chain of command as the routine chain of command is very large in Apple.
New Product Development Process at Apple Inc.
The NPP process at Apple Inc. is known as ANPP (Apple New Product Process). ANPP starts when the product enters into the design phase. Mainly, ANPP is the documented part of the project, which documents in detail every step of the development process of the product. The concept was first successfully applied to the Macintosh project at the company. Basically, it outlines the whole project, i.e. details of every stage, person in-charge for completion as well as detailing of personnel at every stage and duration for completion of the project.
Reviewing product every Monday
A meeting of the ET takes place every Monday for the purpose of analysis the progress of the process of all products. The ET of Apple completes this task because it has very only some products in the production line. If some process is not reviewed then it is scheduled in the next meeting. By doing in this way, the decision of ET is taken on every process of the product .
Integration Ways of NPD components in strategic growth
Chief Executive Officer Tim Cook brought a number of changes / approaches to the company and greater flexibility of Apple’s product and that appeared to be a new approach in this regard. They said the approach has incorporated specific modifications intended to expand the number of its regular customers as well as to satisfy the existing customers. As long as these refreshing and precision modifications continue, it will rightly be said that Apple will gain plenty from product development with a modified approach .
New Product for Growth
In order to attain strategic growth, the company needs to introduce a new type of product. The new product proposed in this study for development and sale by Apple Inc. is a virtual reality 3D headset. This product is the rising trend and considered as the peak level of innovation in the smartphone industry. A smartphone is inserted into a headset that converts it into a 3D virtual reality simulator, giving the viewer the perception of being in the movie, or the game, etc. This product would be made compatible with all the sizes of an iPhone through adjustable strap. This will result in increased demand for iPhone hence company growth would be attained. The product will also be made compatible with other smartphones in order to reach out to the consumers using smartphones of other companies. Adjustable strap of the product will be used to adjust with the different sizes of smartphones. The 3D virtual headset will be designed as highly light weight and ergonomically in order to make is simple and easy to use by the users. The headset will also include a built-in set of headphones that will automatically connect to the smartphone placed in it and play the sounds to the users.
Conclusion
Apple Inc. is a highly innovative company that has captured large markets around the globe in the smartphone and laptop / computer industries. The company has always brought innovative products to its customers through sleek design and user-friendly features. In order to stay highly innovative company, Apple treats its designers as royalties. They are given all the perks and privileges that anyone at another company can only imagine. The designers at Apple Inc. are provided with all the resources they require. There are three major components of NPD in Apple Inc. that include establishing product team, New Product Development (NPD) Process, and reviewing product every Monday. In order to attain strategic growth, the company needs to introduce a new type of product. The new product proposed in this study for development and sale by Apple Inc. is a virtual reality 3D headset. This product is the rising trend and considered as the peak level of innovation in the smartphones industry.
References
Apple Inc., n.d. Identify your iPhone model. [Online] Available at: https://support.apple.com/en-us/HT201296[Accessed 05 August 2016].
Apple Inc., n.d. iPad Pro. [Online] Available at: http://www.apple.com/ipad/[Accessed 07 August 2016].
Apple Inc., n.d. MacBook. [Online] Available at: http://www.apple.com/mac/[Accessed 06 August 2016].
Apple Inc., n.d. The future of television is here.. [Online] Available at: http://www.apple.com/tv/[Accessed 06 August 2016].
Apple Inc., n.d. You. At a glance.. [Online] Available at: http://www.apple.com/watch/[Accessed 04 August 2016].
Apple.com, n.d. Apple Software. [Online] Available at: http://www.apple.com/shop/help/downloadable_software[Accessed 04 August 2016].
Etherington, D., 2013. Apple’s New Product Strategy. [Online] Available at: https://techcrunch.com/2013/05/30/apples-new-product-strategy/[Accessed 07 August 2016].
Martin, 2016. The Apple Product Strategy. [Online] Available at: https://www.cleverism.com/apple-product-strategy/[Accessed 05 August 2016].
Panzarino, M., 2012. This is how Apple’s top secret product development process works. [Online] Available at: http://thenextweb.com/apple/2012/01/24/this-is-how-apples-top-secret-product-development-process-works/#gref[Accessed 03 August 2016].
Wakabayashi, D., 2016. Services Business Emerges as Key to Apple’s Core. [Online] Available at: http://www.wsj.com/articles/services-business-emerges-as-key-to-apples-core-1461791330[Accessed 04 August 2016].
