Free Innovation in Action Essay Sample
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Apple Inc. originated in the Santa Clara Valley in the surrounding area of California and was founded in 1976 by Steve Wozniak and Steve P. Jobs. They are well-known for creating the first personal computers Apple 1, where everything had to be manually coded into the machine. Apple 1 was outstanding since it utilized a standard television as the monitor, unlike other computers, which did not have a display. Apple 1 was also unique, in terms of its design, as a result of the minimum amount of chips it utilized, hence, decreasing both price and complexity. In April 1, 1976, Apple II replaced the earlier personal computer and paved the way for the era of cassette drive, where programs were saved and loaded (Franklin 2006). Apple II encompassed an augmented television interface, which facilitated it to display graphics, and ultimately, color. It also had an advanced case and built-in keyboard, making it automatically user-friendly and different from Apple I that required assembly. As a result, hundreds of programs were built and Apple Inc was compelled to open a cottage industry in software to accompany its incredible personal computer. Due to intense competition from computer makers such as Commodore and IBM in the early 1980s, Apple Inc. created Apple III, specifically designed for business users. However, the new computer was susceptible to overheating and crashing and, thus, ended up as a failure. In 1982, Apple pioneered Lisa, a powerful machine that embodied a graphic user interface and a mouse. Lisa did not thrive in the market and by the time it was removed, Apple Inc. had proposed a new innovation, the Macintosh, which seemed to be very successful. In 1984, the Macintosh was created and it proved to be innovative due to its unique mouse input device and user-friendly graphical user interface (GUI). It was an innovative design, embodying a striking case with an inner architecture that facilitated it to connect peripherals. Additionally, it was well-resourced with a user manual, as Apple Inc. had issued a professional manual, designed to relieve the work of those who would build up application software for the Macintosh. Apple Inc. went through a number of phases after the successful innovation of the Macintosh. In April 1984, it introduced a solid and less flexible version of the Apple II, known as the IIc. Later in September 1986, it created the fifth and most powerful Apple II, known as the Apple IIGS, which encompassed a mouse-driven operating system, a 16-bit architecture, startling color graphics, as well as top-shelf sound capacities that exceeded other computers, including the black-and-white Macintosh (Hurwitz 2011). In summary, Apple has widely been noted for inventing the personal computer (pc) with the Apple II during the 1970s and making computers more user-friendly with the Macintosh in the 1980s. Innovations, including the mouse, click wheel and the GUI have provided intuitive methods to access digital content. Apple Inc. is widely noted for its advanced computer technology through popularizing technology similar to FireWire for quick data access and Wi-Fi for wireless internet access, hence, increasing the speed of data without the clutter of wires.
Impact on Citizens and Consumers
Apple Inc. has produced a low barrier to entry by generating software that is exceptionally user friendly and intuitive, hence, enabling consumers to make use of it without reading the manual. The constant and conventional user interface across applications, interoperability, and an integrated help system has facilitated citizens and consumers to be productive. Additionally, establishing digital media playback such as iPod, iTunes and iPhone has created the platform for consumers to listen to music, watch television and films, and make phone calls. Apple’s innovations such as the iMac and iBook has permitted customers to be connected online just within a short duration after opening the box and, thus, set a new method for internet access. Due to intense competition from multinational rivals, for example Samsung, Apple’s was compelled to reduce the price for its new iPhone models from the original price. The iPhone reasonable price tag and exceptional appeal has drawn new customers and provided loyal customers an extra cause to purchase from Apple. Consumers are able to communicate more easily as the iPhone has modernized mobile phones and iChat AV, thus, enabling family and colleagues to videoconference across the globe. Apple has benefited users due to its simplicity and vulnerability to fewer viruses. Moreover, consumers prefer it to other computers since it has additional design features and has distinctive brand, emerging from its unique name, logo, slogan, iconic advertising, user base and design. Apple has offered its consumers an emotional benefit through its self-expression of stirring up flashy and trendy personal computers and electronic devices. In addition, when formulating the marketing mix, Apple has selected a distinctive distribution plan to gratify the needs of the target consumers and realize the firm’s goals (Landa 2006).
Impact on the Business
Since Apple Inc. developed one of the first personal computers approximately 35 years ago, computers, operated by individual employees, have gradually influenced the way businesses conduct their transactions. Apple Inc. has afforded various businesses the opportunity to design and to create products as well as keep track of billing, inventory, and customer information. As a result, computers are now engaged in most key business functions. Additionally, launching digital media management for instance iTunes, iPhoto, and iMovie has spearheaded the digital media revolution and simplified the way businesses to administer their digital content. Businesses have saved digital media commerce as Apple Inc. has single-handedly released the music industry from the threats of peer-to-peer file sharing networks. Besides, the Apple store has turned out to be the world’s best retailer by launching simple innovations that business have adopted to create permanent emotional connections with its customer (Apple 2011).
4 P’s of Marketing
Gitman & McDaniel (2008) asserted that after Apple’s sales and market share disintegrated in the mid-1900s, Steve Jobs revived it by structuring the company’s product strategy within a two-by-two matrix. Within this matrix, the company initiated two different models (desktop and laptop) for two diverse market segments (professional and consumer). The PowerMac and the PowerBook models were targeted for the professional market, while the iMac and the iBook were targeted for the consumer market. These products were designed to embody a lifestyle of branding strategy that would be offered to not just computers. Eventually, Apple went through professional, consumer, and generational margins with the iPod, presently the world’s best-selling digital audio player. The 2007 innovation of the iPhone likewise changed the company into a serious competitor in the cellular handsets market. Using its strategy of innovative product design, Apple was able to combine its products into a comprehensive strategy that counted on the digital world.
As a matter of fact, Apple has launched various product innovations in its 30-year plus years of existence, including the Apple II, the Macintosh, and the iPod. It has also offered a wide variety of product line extensions and revolutionary applications. In hardware, Apple released the trend-setting iMac desktop computer and fabricated the world’s thinnest notebook, MacBook Air. Due to its programming efforts, Apple has offered its consumers the OS X operating system with a “Leopard” interface. Apple’s homegrown applications for instance, iTunes, iMovie, iWeb, and GarageBand are simplified with a point-and-click feature, hence, changing beginner computer users into multimedia wizards (Hoyer & Macinnis 2009).
Place (Distribution Channels)
According to Magal & Word (2011), Apple Inc. has mostly been noted for employing multiple distribution channels. It, mainly, sells its products through its online store (internet), its Apple stores (retail), and third-party retailers (wholesale). Apple Inc. distributes its products by engaging resellers, who, then, distribute products to buyers and users. This is facilitated through the use of reseller education programs that teach resellers facts about products, methods of using the products, and method of selling the products to buyers and users. Apple has carefully assessed new locations for its stores, based mostly on the local demographics of those consumers who are the target buyers. Currently, Apple Inc. has created a foreign production facility by incorporating three manufacturing plants in order to contain its foreign demand. Its original plant in California is used to handle the huge demand of U.S. customers. The second plant in Europe deals with manufacturing computer products that are distributed to sales offices all over Europe. The third plant in Singapore deals with creating computer products that are distributed to sales office all over Asia. All the three plants have enabled Apple Inc. uphold fairly low distribution expenses due to its huge demand for its products. Since Apple highly regards its customer’s buying experience, it attempts to set up either an Apple-owned retail store or a mass-market retail store in each major market. This policy is aimed to reach a huge population of the consumers in most developed nations that reside within a nearby retail store of Apple products.
When crafting the marketing mix, Apple selected a unique distribution plan to satisfy the requirements of the target consumers and realize the firm’s goals. Even though, Apple utilized innovative advertising at different points, when promoting its Macintosh computers, its venture into retail stores has been a key driver in making product interest and sales. Initially, the company has collaborated with retail chains such as BusinessLand, ComputerLand, Sears Business Centers, ComputerWare, Circuit City, and CompUSA. Apple has mainly used informative promotion in promoting its products during its early stages of the product life cycle. For instance, when it pioneered the iPhone, its touch screen functions were original to the Smartphone class. To inform consumers of the phone’s features and its mode of operations, Apple conducted a series of commercials, presenting a hand controlling the phone. The voiceover offered information about the advantages of the phone by a brief story about how the iPhone makes life easier. Similar commercials have been aired with regards to the iPad to inform consumers about the advantages of a larger touch screen. Apple has always promoted its products by advertising its products, using price discounts and communicating its features and benefits. Besides, Apple makes use of the commercial promotion channels like TV, radio and print media. It has a professional internet presence, where products are clearly displayed using guided tours. It greatly promotes its products through the iTunes Music Store and offers a virtual iCommunity for advertising and customer communication functions (Ireland, Hoskisson, & Hitt 2008).
The outstanding positioning of Apple’s computer and laptop as intuitive, user friendly, innovative, and revolutionary has enabled it to command higher prices for its products as compared to its PC-based rivals. Apple Inc. has been utilizing advanced produced strategies, incorporating tactical offers for instance, bundling or volume discount pricing. In addition, it provides its customer special prices, when they order a definite volume of products, for example, iPods, which are entirely available online. According to Baker (2006), from previous times, Apple has been setting high prices for new products for two main reasons: to strengthen the brand’s high-end positioning and special cachet, and to begin to earn development costs and to gain profits from the onset of each product’s life. By setting high initial prices, it has appealed to early adopters, those customers for whom the products have the uppermost perceived value right from the onset. It later reduces its prices by launching newer models to appeal to a wider audience. This pricing strategy has successfully worked with Apple’s Macintosh computers as well as its iPods. Its specific approach to pricing has enabled it to draw and retain customers. However, customers’ complaints due to the initial high price compelled Apple Inc. to employ a market penetration pricing strategy of its new 3G iPhone. It, thus, introduced the new phone at a lower price or equal to its key competitors, Palm and RIM; the new pricing strategy was designed for business users. Apple psychological benefits of distinctiveness and customer satisfaction through its Apple stores have facilitated it to keep prices relative to high competition, although the total prices have dropped over time (Bettis 2005).
As previously noted, Apple was a classic Valley startup. The first product, Apple I, was strictly for the hobby market and consisted of a circuit board but no case. Other innovations, which later came up, include Apple II Model, Lisa and McIntosh. The most powerful aspects of the customers’ experience with Apple are confined to its products, which include iMac, iPod, iPhone, and iPad. With such unique products, Apple has been on the forefront of design, aesthetics, and functionality. Apple has left a huge impact on technology, consumers, society, and the world at large and still thrives in its innovation today. Its groundwork on the originality of personal computers, has transformed technology into an indispensable tool of our daily lives. Currently, computers have provided information, communication, and entertainment in astonishing ways. Thanks to the Apple Company, as it has been instrumental in popularizing the personal computer through a combination of price, promotion, place, and production, for ease of operation.