Essay on Strategic Change: Apple Inc.

Introduction

A company may go through a variety of changes during the course of its existence. Some of these changes might happen to counter internal or external challenges. However, strategic change occurs when a company needs to get the most out of its business strategy (Bryson, 2018). In other words, strategic change is a method of altering a business’s aims and strategy in order to ensure higher success. To further understand strategic change this paper studies Apple’s innovative strategy; it conducts a SWOT (strengths, weaknesses, opportunities, and threats) and an appreciative inquiry analysis on the organization and explains why the company is in need of strategic change

Company Overview

Steve Jobs and Steve Wozniak created Apple Computers in 1976 (McCray et al., 2011). During this time, computers were huge and most had a wanting external design (McCray et al., 2011). Other computers were sold in kit forms not in assembly machines and more importantly there were those that used switches instead of keyboard and display. The dual (Jobs and Wozniak) changed this. The first computer they created (the Apple-1) came with no switches and had an appealing external design (McCray et al., 2011). Apple’s iPhone is another innovative product that brought the world to a standstill; this product changed the industry in a great way. In fact, companies that were unable to keep up with the speed at which Apple was innovating were left behind and most including Nokia failed. The innovative strategy employed by Apple Inc. has allowed the company to attain success (McCray et al., 2011). Also this strategy has enabled the company to build upon a steady consumer appetite for latest and greatest product. However, and with declining iPhone and PC sales, the corporation is beginning to resemble other firms whose laxity drove them off the demand curve. Apple’s innovative strategy is no longer practical and there is a great need for strategic change.

The Need for Change

Apple’s innovations and creativity strategy has long been regarded as the lifeblood of the company’s success. The company has managed to attain an incredible level of success thanks to its innovative products (Lazonick et al., 2013). For instance, in the year 2001 the company released the iPod, a creative hand held device that could hold more than a thousand songs. On the first day of trading after the iPod was launched the company’s share price rose by 6.6 percent to stand at 10 dollars per share (Lazonick et al., 2013). The iPod set the bar for other companies in the portable media market; however, the success that came with this device was short lived as people are now carrying music on their phones.

The MacBook and iMac computers are another well-established examples of wildly fruitful Apple products. Apple shares were trading at 7 dollars per share before the iMac was announced (in May 1998), but following the product’s launch, the company’s share price jumped by 21 percent.

Another product that propelled Apple to its success is the iPhone (Lazonick et al., 2013). The iPhone is, without a doubt, the most revolutionary product ever created. It combined three distinct products: an iPod with touch screen control, a mobile phone and a breakthrough internet communication gadget with computer-class web browsing capabilities. The company sold around 270,000 iPhones on its first day of release (Lazonick et al., 2013). A month later the company had sold over 500,000 phones; the stock price at the same time had risen from 122 dollars per share to 141 dollars per share a fifteen percent increase thanks to the iPhone.

“Apple is no longer innovative” (Sawhney, 2019); This was what Apple critics said after the ultimate death of Steve jobs. Unfortunately, there is much evidence that seem to support this statement. After the last and fourth quarter of 2018 the company stop revealing sales numbers for iPad, iPhones and MacBook. This according to Sawhney (2019) implies a significant slowdown in sales growth of Apple’s main products. Prior to this the company stopped revealing iPod revenues to the public and then it stopped its production altogether. This may be the case with iPhone and other products within the company’s product line. Sawhney (2019) believe that the company is experiencing an innovation halt. This current situation was foretold by Steve Jobs early in his career when he predicted that Apple would follow in the footstep of companies such as IBM and Xerox if the organization detached itself from its innovative culture that made it successful in the first place. The reality, however, is that Apple’s problems run much deeper than its inability to sell its main handsets. Also, Rayna and Striukova (2016) believe that factors such as the changing consumer preferences and behaviors, and the changing business environment are weighing down Apple’s innovative culture; the company is unable to keep up with consumers’ unwavering need for unending creativity.

SWOT Analysis

As stated above, Apple’s success is linked to the company’s ability to identify needs within the market and solve them with innovative products. Also, the company has three notable strengths (Abdul Malik et al., 2013). First, Apple is amongst the world’s strongest brand. Second, the firm has significant profit margins, and third, the firm has efficient quick invention procedures which are built on a long tradition of technological innovation. The company could profitably offer new items thanks to its strong brand image. Moreover, Apple’s intensive growth strategy includes effective rapid innovation an instance that allow the company to keep abreast with the latest technology to ensure competitive advantage.

On the other hand, the company’s weaknesses include a limited distribution network, high product costs, and an increasing reliance on revenues in high-end market groups (Lazonick et al., 2013). Apple’s policy of exclusivity limits the company’s distribution network. This exclusivity strategy limits the company’s market reach as only a few wholesalers are authorized to sell the company’s products. In addition to the Apple’s exclusivity strategy the company’s products are believed to be extremely expensive and to succeed the company only relies on high end market segments (Lazonick et al., 2013). These are weakness that the company should consider.

Despite these weaknesses the company could capitalize on the numerous opportunities within its reach. For example, the company could consider extending its customer base; this potential is related to the company’s distribution problem. Apple could potentially consider aggressive marketing, particularly for its mobile goods, to increase sales. This opportunity is linked to the increasing demand for mobile phone products. Because the company has a strong brand image it could develop and introduce a new product line.

Furthermore, to succeed as an innovative company Apple has to deal with threats. According to Abdul Malik et al. (2013), threats are external factors that limit the performance of a company. Apple faces a number of threats, including fierce rivalry from companies like Microsoft, Samsung, and Amazon, rising labor costs in various countries, and, most critically, imitation from companies that compete on price.

The results from the SWOT analysis discussed above shows that Apple possesses enough strength to effectively address its innovation stalemate. Importantly the company could use these strengths to exploit opportunities such as expanding to other consumer electronics in addition to mobile phones and computers. The company also enjoys a strong brand image; this is a significant strength according to Lazonick et al. (2013). It could use this strength to capitalize on other industries such as agriculture, healthcare and transport.

Appreciative Inquiry Analysis

In order to conduct a practical appreciative inquiry analysis one must decide on a topic (Whitney & Cooperrider, 2000). The topic should consider an aspect of a company that is doing well and one that is critical for future success. This appreciative analysis considers Apple’s innovation business strategy as it is core to the growth and success of the company. In often cases, an appreciative inquiry analysis follows four distinct phases known as the 4D cycles.

The first amongst the 4D cycles is the discovery phase (Whitney & Cooperrider, 2000); here, one should consider “the best of what is.” Also, to be effective in this phase one should identify the company’s strengths, best practices, peak performance and more importantly sources of excellence. Apple’s innovation strategy has allowed the company to attain significant success over the years. More importantly, the company established itself as an innovative company when it introduced the iPhone to the market. Since its launch in 2007 the iPhone has developed to affect people’s life and the way of doing things; in fact, the launch symbolized a significant moment for the company. Leadership and ideas from the Steve Jobs were among the many factors that played a significant role in this case.

The dream phase follows the discovery phase in the 4D cycles. Here, individuals are encouraged to imagine how an ideal innovative organization ought to look like (Whitney & Cooperrider, 2000). Individuals are also encouraged to imagine how leaders, resources, behaviors and other critical organizational elements would change to attain the ideal status. One aspect of the company that need to change for Apple to attain its former glory as an innovative company is leadership. The company needs a visionary leader like Steve Jobs. After Jobs was forced out of Apple in the 1985 the company suffered (Lazonick et al., 2013); Apple began to lose its control on the computer industry and sales dropped significantly. The company needed Steve Jobs to be successful. Tim Cook, Apple’s current CEO has shown the world that he can be a very competent leader but not as visionary as Steve Jobs.

After the dream phase has been made clear one should consider how they should design the future (the design phase). In the design phase individuals should consider critical steps necessary in attaining the set vision (Whitney & Cooperrider, 2000). Being strategic and tactical is critical in this phase. Finding a visionary leader who will lead Apple in maintain its status as an innovative company is a human resource issues. Apple’s human resource department should put in place strategies that will attract talent from the global labor market. Apart from installing strategies that attract talent the company should provide appropriate resources and training platforms to its current employees. The final phase in the 4D cycle is the destiny phase. Here individuals are encouraged to together to implement the design in order to make the vision a reality. Also, participants are encouraged to decide on what and how they should contribute to the dream and the proposed design.

The lack of a visionary leader has been identified as a significant issue in the appreciative inquiry analysis. It is evident that Apple’s peak moments were realized under Steve Jobs leadership. Steve Jobs led the company through significant breakthroughs (Lazonick et al., 2013). Finding a visionary leader like Jobs would ensure that the company’s true vision becomes reality. The company’s goal of obtaining stellar products and services within a tight timeframe and at a cost that represents the best value would only be attained by a leader with characters and the attitude of Steve Jobs. Moreover, it is important to note that both SWOT analysis and appreciative inquiry analysis have delivered useful insights on how Apple should move forward in maintaining its innovation strategy. However, appreciative inquiry offers practical more detailed outcomes. Rather than focusing on company threats and weaknesses appreciative inquiry focuses on strengths and positive approaches that would help the company grow.

Conclusion

Innovation has long been the heart and soul of Apple Inc.; importantly, it (innovation) is one of the greatest strategies the company has used over the years to overcome challenges including competition. It is innovation that has allowed the company to rise to its status as it is today. However, Apple’s innovation strategy is at a standstill; the company is no longer innovative as it used to be and currently Apple is unable to keep up with consumers’ unwavering need for unending creativity. This triggers a significant need for change. The paper has used two strategic planning techniques (SWOT analysis and appreciative inquiry analysis) to help the restore the company back to its innovative stature. The SWOT analysis revealed that Apple has sufficient strengths to successfully overcome its innovation deadlock while appreciative inquiry analysis identified the lack of a visionary leader as a significant corporate issue. Apple’s SWOT analysis and appreciative inquiry analysis have provided important insights into how the company should continue to pursue its innovation strategy. Appreciative inquiry, however, provides more practical and specific outcomes.

References

Abdul Malik, S., Saad Al Kahtani, N., & Naushad, M. (2013). Integrating AHP, SWOT and QSPM in strategic planning- an application to college of business administration in Saudi Arabia. International Journal of Academic Research, 5(5), 373-379. https://doi.org/10.7813/2075-4124.2013/5-5/b.58

Bryson, J. (2018). Strategic planning for public and nonprofit organizations: a guide to strengthening and sustaining organizational achievement (5th ed., pp. 187-218). NJ: John Wiley & Sons, Inc.

Lazonick, W., Mazzucato, M., & Tulum, Ö. (2013). Apple’s changing business model: What should the world’s richest company do with all those profits? Accounting Forum, 37(4), 249-267. https://doi.org/10.1016/j.accfor.2013.07.002

McCray, J., Gonzalez, J., & Darling, J. (2011). Crisis management in smart phones: the case of Nokia vs Apple. European Business Review, 23(3), 240-255. https://doi.org/10.1108/09555341111130236

Rayna, T., & Striukova, L. (2016). 360° business model innovation: toward an integrated view of business model innovation. Research-Technology Management, 59(3), 21-28. https://doi.org/10.1080/08956308.2016.1161401

Sawhney, M. (2019). Opinion: Apple is playing catchup. New iPhones won’t help. CNN. Retrieved 18 June 2021, from https://edition.cnn.com/2019/09/10/perspectives/apple-event-iphone-android/index.html

Whitney, D., & Cooperrider, D. (2000). The appreciative inquiry summit: an emerging methodology for whole system positive change. Journal of The Organization Development Network, 13-26. Retrieved 18 June 2021, from http://www.davidcooperrider.com/wp-content/uploads/2011/10/The-AI-Summit-Methodology-x.pdf.