New Theory of Innovation Management †Free Samples to Students

Question: Discuss about the New Theory of Innovation Management. Answer: Introduction: Apples first version of the iPhone was released in 2007 when it gained over 270000 sales of the product within the first 30 hours of launching the product. In 2014, the company shipments were about $1.3 billion and above, which means that the firm is doing well. This is done by opening new retail branches in new markets such as China, Middle East, and Africa. However, the challenge is that Apple is yet to make anything or any product to replace the iPhone, because once everyone has an iPhone the probably that sales will drastically decrease. With the consideration of the fast-growing competition from other players in the mobile phone industry, who make different products consistently giving the target market a choice of the available varieties(Carlton, and Annotations. 1997). Another concern to the Apple Company is to meet the consumers expectations. Due to the brand name, people regard Apple and its products higher than other tech companies in the same industry. Every consumer is always keen for the new product the company launches due to the brilliant marketing campaigns. Still, the situation is that after the release, most people get disappointed by the features available in their gadgets, for example, the iPhone 6. Later, they come to notice that it was just another smartphone, tablet or computer in the market. For the business sector, not meeting customers expectations is a downgrade for the companys product. Another issue is the supply chain problem of the enterprise, which depends on specific suppliers to provide the material the company needs. For example, the flat panel display, DRAM, and flash memories suppliers may fail leading to losses. The problem with their low improvement of software is another issue. Like the IOS and OSX, which cost consumers a lot of money, the quality of advancement was low, and instead, the new software systems came with a lot of bugs and defects, lowering the company standards. The financial situation in the company is constant, but Apples several profitability ratios approve the companys existing business activities and economic accomplishment being sustained by its stellar sales increments in recent years has a brighter future ahead. Profitability ratio indicates various factors that support towards making a profit, for example, the net profit margin, return on assets and equity. The organization's stock closed at $94.02 per share in February 2016, which was close to about its $92 to $134.54 per share. The organizations quarterly income report of the financial duration finished in December 2015 demonstrated that its iPhone deal ascended below 1% compared with the past year rate, the items lowest year over year sales development. Apples present estimate proportions are to a high degree appealing on account of its value drop (Caldwell, 2016) Key success factors of Apple Inc. With all the competition in the industry of technology, Apple has managed to remain at the top of the list regarding profits gained and innovation. This is because of the following:- The ability to keep things simple, Apple Inc. has only one iPhone model which they keep advancing over time, compared to other players in the industry who have a variety of smartphone model. That, in turn, lowers the focus in development and innovation. This aspect helps the company thrive in the market by providing upgrades features to its customers who can keep track (Andre, et al. 2009). The company holds a lot of scrutinies before they make any release, the measuring standard that was developed by Steve Jobs to help the companys product to be of quality and appealing to the customers and the company itself. The simplicity of the products, and the customer service provided at any Apple store. The fact that the company improves its features in their products, they always make it to the simplest form. For example, the user interface of the first Apple phone to the current are almost the same yet with allot of improvements. Also the instance after sale service and the sales person customer service, for example when one gets into an apple store, they dont ask how can I help you? instead they ask what do you want to do today?. Making everyone feel as if they are an asset as opposed to liability. Which also points out the reason as to why new customers do 50% of Apple sales (David, 2011.). External and Internal Environment The environmental factors are issues that affect the business, and the business, on the other hand, has no power to control them. The competition in the industry, where the tech market is being reshaped from numerous points of view, is high. Evidence in software and hardware distribution takes new angles. To reach the target market, a lot of money should be used to force innovation rooms in all companies to keep up with the competition, which affects every play in the market, because new inventions only last for about a month and another enticing and better tech is launched. Such situation makes a small company to lose a lot of capital in the research department of the implemented innovation, and it has no time to earn more revenue and compensate the costs, and it also intensifies the competition farther (Rothaermel, 2015). The risk for new entrance in the industry of smartphones, software application, and computers is moderate as the cost of establishing a company in this area is extremely high, limiting most investors to venture in. The brand name is another challenging factor. For example, to earn a brand name, Samsung, Microsoft, or HP, it takes a lot of capital to produce a quality product and time to make a portion in the market share. New entrants are unable to compete, although some new companies like Chines firms who fetch financial support from the government and better financial institution have the ability to challenge the old and established companies. The probability of such competitors is low in the future. However, it is important for Apple to continuously strengthen the competitive situation through new product creation and establishing brand loyalty, generating a competitive advantage over the new companies. The providers power is based on the potential ability of individuals to affect the pricing of products in the market. The bargaining power of vendors is rather weak in the market areas where the Apple products operate. This is brought about by the potential barriers of the new entrance, which reduces the competition in the industry. Also, the manufacturers of its parts suppliers, for example, the creators of laptop processors, are themselves extremely competitive. Giving the advantage to the big companies like Samsung and Apple, a reduced cost in the exchange of one supplier for another to be rather low, without any significant obstacle. Plus, this type of the companies is major customers. With regards to some sales recorded by tech companies, it projects the strengths in purchasing power of the consumers, for instance, the amount of revenue collected by Apple with less than two days, on their first iPhone generation. The customers power mostly works with the ability of consumers to control the prices. The control is influenced by the number of buyers or clients, the value every client has, and the cost of the change of a particular companys product to the alternative. The lesser and much powerful a customer base is the more influence it holds. The Threat of Substitute Products This kind of market force is relatively small although competitors keep on producing an alternative substitute for the other companys product, even though they never get to create a replica, they pose a threat to the market share of the other company. For instance, if a client relies on a particular firm to deliver a device or service that can be substituted for another companys product or just by doing the task manually and this substitution is cheap and easy to do, the companys power can be faded over time In the technology industry, Apple has had its best share in earning a positive recognition from the people. Investors have also regarded it as a favorable company to invest in, due to its strong returns brought by the consistency of high revenue growth. This places the companys future on a brighter side as competitors in the industry have to fight the external factors that face the industry. Apple has an upper hand in overcoming competitors based on the financial comfort in establishing and running the business, a better innovation center which is well financed and the aspect that they have the acceptance of their product in the market compared to the new companies. With the growing technology industry, the company can enter into many market scopes, such as music players and online stores. It can improve on warranty and regulate its price charges. This will help challenge other players in the market based on the kind of quality the company products are. The company can invest more in the online stores and upgrade the Apple TV. The sales are expected to increase based on the ITV aspect that they intend to launch. Interventions in the process of organizational change Apple is one of the most famous firms in the world; the company forces can be used to address the weakness; this can be done through the exploitation of the strengths to improve the shortcomings. The company can use the well-known and established brand name to innovate new products and gadgets that will not need much of marketing, like the new entrance companies may require, and by this, it will be in opposition to capture large portions of the target market. Another aspect that favors the company is that it is the leading company in innovation. It can help the company earn more revenue, by establishing new and user-friendly products in the already based loyal customers and also attract more people because of the high-quality products they produce. It will directly increase the revenue of the company(Nonala, and Kenney, 1991). The company should not be comfortable with the high sales and profits it makes. Instead, it should set higher targets making its products available in new market areas, like Africa where the product is less popular. The company should also ensure a premium pricing strategy, intended to increase the market share from people who perceive Apple products as pricey. The other recommendation is that the Apple innovation center should by the pace setter in the technology industry, with the move projected in helping the company to stay top of the list in innovations. Since people always by the trendy thing in the market. Venturing into new markets for any company is a risky move to take, based on the uncertainty of the market. Also, new market areas provide a range of opportunities, from new ideas, experience to the sales and profits gathered. This can be done through intense marketing and striking deals with other electronic retailers and also by selling their products at a particular cost as it would increase sales (Nielsen, 1989.). The pricing issues will also help promote sales and profits. The company can consider the strategy to sell more items at a less price than selling fewer items at a higher price. Also the fact that the new generation wants to be trendy at all times, and by the fact that Apple can provide the big thing regarding features, ability, and quality, they can confidently wait to see profits increase. Impact of the changes Intense modifications in the technology filled is the biggest threat, which Apple and its rivals face nowadays. As consumers have turned out to be more innovation aware, with the need to increase the number of new technological items, they only stay viable for a very short time and later outdone. Organizations will face a lot of burdens to keep up with the changes, which increase the rivalry to high levels. Intense competition is another challenge in the new market areas when venturing in; this is because most of the companies have settled, and have provided the service for a long time, where the already have a target market with loyal customers (Martin, 1975.) With the increased taxations from the government. The reduction of product prices may be an effect on the companys net profit caused by the high tax. And operation cost which is all on the increase in recent times. Recommendations The company should invest more in the market research, to lower the competition in the new markets, by this the company will understand the shortcomings of the other competitor's products. The market research will also help develop a pricing strategy that will favor the consumers/customers and the company without developing any crises in the net profit earned. By providing and improving the technology research center at the company, will help to solve the technological changes problem that the firm is facing. This would be achieved through the introduction of new ideas in the human resource department where the employees are the best in terms of creativity and development so as to stay ahead of the competitors in the industry. Conclusion Apple faces a lot of threats from other competitors. For example, the iTunes platform is one of the great inventions the company has derived up with other platforms like YouTube where users can download music for free. It poses a significant fall for the iTunes. The same case is with the Android OS, which is cheaper compared to the Apples IOS. The government also keeps increasing its revenue for the company. Implementing its opportunities, Apple has a brighter future. It can add more features to the current products for greater quality and compatibility. This applies to the rigidity of products the firm should try to make its products flexible to reach a larger market. For instance, most software that the company produces is not compatible with windows of Android operating systems(Caldwell, 2016.). Bibliography Andre, B.K., Coster, D.J., De Iuliis, D., Howarth, R.P., I've, J.P., Kerr, D.R., Nishibori, S., Rohrbach, M.D., Salzger, D.B., Seid, C.O. and Stringer, C.J., 2009. Media device. U.S. Patent D601, 583. Caldwell, J.R., Mx Technologies, Inc., 2016. Display screen or portion thereof with a graphical user interface. U.S. Patent D751, 108. Carlton, J. and Annotations-Kawasaki, G., 1997. Apple: The inside story of intrigue, egomania, and business blunders. Random House Inc. David, F.R., 2011. Strategic Management: Concepts and cases. Peaeson/Prentice Hall. Linzmayer, O.W., 2004. Apple Confidential 2.0: The definitive history of the world's most colorful company. No Starch Press. Martin, R.L., Bell Telephone Labor Inc, 1975. 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