Organizational Study: Apple Inc. Essays Examples
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Apple Inc. is a Cupertino based electronic company. The story of Apple begins with Steve Jobs and his friend Steve Wozniak who started building computers on a garage in 1976. Stories have it that the young Jobs dropped out of college to pursue a career in programing. After a brief stint as a game developer in Atari, Jobs collaborated with his friend Wozniak and started working on their own computer design. Accordingly, in order to raise funds for their new hobby, Wozniak sold his HP 65 calculator for $500 while Jobs sold his Volkswagen bus for $1,500. At this point, it is quite clear that the two Steve’s are now serious about their trade. In their first year of partnership, the two guys started selling computer circuit boards to their circle of friends as well as to local computer stores. Eventually, Mike Markkula, a former Intel executive took notice of their work and decided to fund their operations. Markkula is optimistic that his investments with Jobs and Wozniak will eventually prosper and predicted that in less than two years, their company would enter the Fortune 500 list. Indeed, Markulla’s words seemed prophetic and two year time after he invested with the two Steves, Apple became a multibillion company. However, Apple’s rise into prominence is not just through sheer luck and fleeting popularity, rather, it is a story of prudent management and marketing practices combined with a culture of creativity and innovation.
Company’s Product and Market
There is no doubt that Apple products were its major strengths and has differentiated the company from its highly competitive environment. Over the years, Apple has spearheaded a flurry of product creativity and innovations, which defined what the ‘in’ thing is and what not. Apple is considerably a trendsetter since most of the products that were produced by the company has become enormously successful and has established a cultic following. One of the major reasons why Apple products are so in-demand is because they are not only created with the customer in mind; but they are also created with passion. As observed by Bajarin, unlike other companies whose engineers create something only because they can, in Apple, engineers create their products because they also want it for themselves. Today, Apple has a long list of products that are patronized by consumers all over the world. Primarily, Apple Incorporated designs and manufactures computers, laptops, tablets, music players, cell phones and other electronic products and services. Aside from electronic hardware, Apple also offers digital products such as applications, music, videos, etc. through its iTunes store. A close analysis on some of Apple’s products would reveal that it is somehow comparable to Veblen goods because of its effect on consumers. According to scholars, the Veblen effect exists when consumers “exhibit a willingness to pay a higher price for a functionally equivalent good”. Take for instance the similarity of Apple products to the products of its competitors. The iPhone and Samsung’s Galaxy series, for example, have been quite similar in terms of functionality in most respects except for the brand. Yet one could not fail to notice that the iPhone is priced at a higher price margin as compared to its Samsung Galaxy counterpart. A comparative study between Apple’s iPhone and Samsung’s Galaxy, for instance, revealed that the original Galaxy S4 is at least $94 cheaper than the iPhone of similar generation. Despite the big price difference, most consumers are still willing to pay for an Apple product. And the status-concious consumer as well as the brand concious ones would not want to pay less. These consumers understand too well that quality comes with a price while the company also know that selling their products cheaply would also put down its high-end image thereby decreasing its desirability. Worstall has also observed the Veblen effect of Apple products. As observed by Worstall, there is an aura that surrounds the company and its that somehow justifies their higher prices. Accordingly, people show how clever, hip, connected, rich and tasteful they are by having Apple items.
Organizational Life Cycle
Ever since its founding, the company’s leadership has undergone several ups and downs yet it is already clear from the start that Steve Jobs would play a crucial role in the company’s future. Even so, there was a time in the company’s history that Jobs was forcibly fired from the company he founded. It was in 1980’s when Jobs decided to launch a computer named Lisa, in honour of his unacknowleged daughter. But Jobs was thrown out of the Lisa project because he gets easily upset and is emotionally unpredictable. The Apple Board then turned to John Scully, then the company’s CEO, who was hired by Jobs himself. After a brief power struggle, Steve Jobs was eventually fired by his Board of Directors and gave Scully full control of the company. For Jobs, his firing from Apple was the most devastating experience of his life. However, Jobs’ firing from Apple was also one of his most remarkable experience since it taught him to be more mature and to become a better entrepreneur. In Jobs’ absence, the company got into several difficulties and was struggling to get back on being profitable. Jobs, on the other hand, founded two notable businesses; one is the computer company, Next and the other is an entertainment animation film studio named Pixar. According to sources, Steve owned 80 percent of these companies and eventually made his net worth the billion marks which is 5 times the money he made while he was with Apple. Meanwhile, Apple’s new CEO, Gil Amelio, decided to get Jobs back into the company, which he initiated by buying Jobs’ NeXT for $400 million dollars. The move reunited Jobs with Apple and he was named as interim CEO in 1997. A more mature Jobs, this time, conducted an overhaul of the company. One of the most significant revolutions that Jobs started that changed the company’s perspective and culture was his campaign of creativity and innovation. ‘Think Different’ was the company’s new slogan, which marketed on the idea that Apple users are unique. ‘Think Different’ has also driven a flurry of innovative products that catapulted Apple to its present day status. Among these products are the iPod, the iPhone and the iPod.
Prior to Steve Jobs’ passing, Apple has been structured so that he has a direct to the other entire important department within the company. Below is a graph of how its founder organized Apple.
Figure 1. Apple Organizational Structure
Now that Jobs has already passed away, Apple still has the same organizational structure where its present CEO, Tim Cook is still the central person in the company’s decision making. Today, Apple organizational structure looks similar to the chart below.
Figure 2. Current Organizational Structure of Apple Inc..
The company’s strategy is focused on making innovative products and marketing. Marketing is very important in Apple that almost all of its activities are interconnected with its marketing initiatives. The company is so obsessed with marketing that, as observed by Edwards, in Apple, everything is decided by the marketing team of the company. In analyzing the company’s marketing campaign, it only boils down to a central principle and that is of branding. Brand image is the core of the company’s marketing campaign. As observed by Edwards, “Apple cares about its brand image above all else”. For the same reason, all of Apple’s marketing campaigns are evidently focused on improving its brand image. But what is this brand image that Apple has been building? As observed, over the years, the company has promoted an image of simplicity where most of its product as well as its marketing campaigns are based. Apple products, for example, are painstakingly made so that the outcome is a product that is not only sleek and elegant but also easy to use. Simplicity is also the focal point of Apple’s advertisement campaigns and is found to be more effective than the elaborate marketing messages that most companies use. As observed by DeMers, “Increasingly, marketers are finding that offering more – more copy, more complexity, more information – isn’t working like it once did”. In Apple’s recent advertisement, DeMers observed that there were no lengthy product features nor there were price comparison that was mentioned. Accordingly, the company’s advertisement is only meant to do one thing and that is to emphasize how the Mac is better than PC’s. Similarly, the Apple stores has the same simplicity concept that also serves as a huge factor in Apple’s marketing campaign. Interestingly, the simple features of Apple products as well as the image of its stores creates an aura of sleekness and elegance that can only be identified with the brand.
The electronic industry where Apple operates is not that hard to penetrate because of the ease of which aspiring individuals and companies can participate. It should be noted that most giant companies in Silicon Valley originated from small beginnings. Apple, itself, started from a small garage before it became one of the world’s leading electronic companies. For the same reason, the industry where Apple operates is saturated with competitors. It is thereby necessary that the company should cultivate and maintain a culture of creativity and innovation and to keep itself ahead of its competitors.
Raw Materials Sector
Apple gets its raw materials from several suppliers around the globe most especially in Asian countries such as China. Unlike its rival company, Samsung, most Apple electronic parts are being manufactured and produced for the company by outside contractors. This could be one of the major drawbacks for Apple because it would have to rely on third party manufacturers in order to make its final products. But in order to counter this disadvantageous position, Apple keeps a huge number of suppliers that are located in several locations around the globe. According to observers, Apple maintains at least 748 suppliers; most of them are located in Asia most especially in China and Taiwan. So instead of being dependent on a few major suppliers, Apple can exert a higher level of power among its suppliers rather than the suppliers having power over the company. As observed by Dou and Luk, “Apple has built up an army of supply chain managers over the past few years to squeeze costs” and the company has also tightened their supervision of contractors especially on their working conditions, which raises over-all production costs in the part their suppliers. But despite the high standards that Apple require from its suppliers and contractors, most of them would like to work for Apple as they are also pushed to improve their company’s standards.
Human Resources Sector
Apple has a habit of hiring the best employees. Jobs, specifically, has a habit of hiring the most talented individuals and pooling them together to work as a team. Jobs is also known to be very particular when it comes to product quality and is always pushing Apple employees to strive for perfection. As observed by Kurian, “He always looked into all possible details of a product meticulously, even at the micro level”. For the same reason, the company has developed a culture that is closely related to the character of its founder. Apple has a huge pool of human resource. In 2014, Apple has at least 92,600 employees and thousands more are hired by their suppliers and contractors.
Financial Resources Sector
Apple is one of the most financially stable electronic companies but its growth has somehow slowed for the past several years. According to observers, the slow growth is due to the increase competition in the smartphone and tablets market. Also, since the explosive growth of Apple, the company’s growth has now become more stable. Sales growth has evidently slowed down since 2010 from 52% increase to only 7% increase in 2014. But despite the slow growth in sales, there is a stable growth in iPhone sales that provided a 20% increase in the company’s earnings in the last quarter of 2014.
Because of its constant innovation as well as the prestige of its products and services, Apple has been a trendsetter. So instead of buyers having power over the company, it is the company that actually manipulates the consumers to patronize their products. In order to ensure consumer patronage, a plethora of support services can be observed such as the iTunes store as well as several Apple applications that can only be found in a Mac device. A customer who wishes to obtain these services could not help but buy Apple products as well. Apple products have also been a symbol of status and class, which can be attributed to its brand building strategies. Having a substantial cultic following, Apple exudes a huge influence over its consumers rather than the consumers having power over the company.
Apple is primarily a technology company and it excels in technological improvements in products, advertisement and sales. Apple uses only stores as well as online apps to promote its products. The company also has online support as well as provides warranty support for its products that has defects in its Apple stores in strategic locations to serve their customers better.
Apple revenue provides a huge tax income for the country where it operates. In the United States, Apple is one of the largest businesses that contribute to the annual tax income of the country. The company also contributes indirectly to the income of other countries that caters to their manufacturing processes. As observed, most of the company’s manufacturing and raw materials comes from third world countries in Asia, which also helps uplift the economy of these countries.
The company is not only engaging in business but also in social responsibility. Apple closely oversees its operations as well as its suppliers abroad to ensure that their facilities are providing the best working environment in terms of employee’s health, safety and recreation. The company sees to it that it provides a wage that provides a high standard of living to its employees. The company is also reducing it environmental impact by sponsoring environment friendly activities such as keeping a high environmental standards in hazardous waste management, wastewater management, and air emission management.
Influenced by its late founder, Steve Jobs, Apple has developed a company culture that is based in creativity and innovation. In studying Apple’s internal culture, there is no other source that could shed more light to how it is inside other than its employees. In a study made by Edwards, several important points are made that provides a clear picture of what Apple is like on the inside. One of the most recognizable attribute of the company is its culture of secrecy. Inside, Apple employees are discouraged to talk about what the company is up to unless the individual has the need to know or is part of a project. The company also cultivates team work and collaboration among its employees. According to one employee, the company demands a collaborative atmosphere and they have to present their work to be checked by their teams. This collaborative environment works best for the company because it serves as a check and balance in order to ensure a better product. Apple employees also come from different background and experiences, which enriches the company’s human resources diversity. Everything in Apple also ensures that the company works at full efficiency as much as possible. As observed by some of its employees, even the company’s cafeteria works seamlessly in order to feed its employees with the best food choices available and keep them fueled to do their jobs.
Apple is a company that has set the itself apart from the highly competitive environment of the digital and electronic industry by outpacing its competitors through innovative products and excellent marketing strategies. But despite the company’s innovation and creativity, it must always cultivate a culture of ‘thinking differently’ in order to maintain its leadership and reputation. Evidently, the company leverages on its brand image, which the company has developed painstakingly over the years through the guidance of its legendary founder, Steve Jobs. Today, Apple has emerged as an icon of simplicity, sleekness and elegance. Consumers, on the other hand, are willing to pay the extra price because of the added value that the company’s products can offer. Evidently, the Apple phenomenon is a result of great design, excellent management and marketing genius.
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