apple product innovation case study

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How Apple Is Organized for Innovation

• Joel M. Podolny
• Morten T. Hansen

When Steve Jobs returned to Apple, in 1997, it had a conventional structure for a company of its size and scope. It was divided into business units, each with its own P&L responsibilities. Believing that conventional management had stifled innovation, Jobs laid off the general managers of all the business units (in a single day), put the entire company under one P&L, and combined the disparate functional departments of the business units into one functional organization. Although such a structure is common for small entrepreneurial firms, Apple—remarkably—retains it today, even though the company is nearly 40 times as large in terms of revenue and far more complex than it was in 1997. In this article the authors discuss the innovation benefits and leadership challenges of Apple’s distinctive and ever-evolving organizational model in the belief that it may be useful for other companies competing in rapidly changing environments.

It’s about experts leading experts.

Idea in Brief

The challenge.

Major companies competing in many industries struggle to stay abreast of rapidly changing technologies.

One Major Cause

They are typically organized into business units, each with its own set of functions. Thus the key decision makers—the unit leaders—lack a deep understanding of all the domains that answer to them.

The Apple Model

The company is organized around functions, and expertise aligns with decision rights. Leaders are cross-functionally collaborative and deeply knowledgeable about details.

Apple is well-known for its innovations in hardware, software, and services. Thanks to them, it grew from some 8,000 employees and $7 billion in revenue in 1997, the year Steve Jobs returned, to 137,000 employees and $260 billion in revenue in 2019. Much less well-known are the organizational design and the associated leadership model that have played a crucial role in the company’s innovation success.

• Joel M. Podolny is the dean and vice president of Apple University in Cupertino, California. The former dean of the Yale School of Management, Podolny was a professor at Harvard Business School and the Stanford Graduate School of Business.
• MH Morten T. Hansen is a professor at the University of California, Berkeley, and a faculty member at Apple University, Apple. He is the author of Great at Work and Collaboration and coauthor of Great by Choice . He was named one of the top management thinkers in the world by the Thinkers50 in 2019. MortentHansen

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Design thinking, innovation, user experience and healthcare design

Design Thinking Case Study: Innovation at Apple

Apple is one of the leading companies that is renowned for its unique products and brand. A short talk with an Apple user reveals there is an emotional relation between consumers and Apple products , including every “i” product created in the past two decades.

Why are Apple products different from their competitors’ products? How does Apple manage to achieve innovation in its product families? Answering these questions provides interesting insight into Apple’s history and how it survived its most critical time between 1985 and 1997.

When Steve Jobs returned to Apple after being fired, the company share was only worth US $5 and its future was uncertain. Today, in 2016, Apple’s share price is around US $108 and the company achieved revenues of US $233.7 billion in 2015 with net income of US $53.39 billion.  This mini case study sheds light on the role that design thinking and innovation played in helping Steve Jobs rescue Apple with his consumer-driven strategy and vision for the company.

The Hard Times at Apple

The early days of Apple (which was cofounded by Steve Jobs on 1976) are characterized by its first personal computer that was delivered with Apple OS. During this time, Apple was dominating the market because there were no other manufacturers of this type of computer as computers were used only by governments or large companies. However, in 1985, Steve Jobs was forced to leave the company. This marked the start of a chaotic era in the company’s strategy and product development.

In the period 1985-1997, Apple struggled to achieve market success, especially after Jobs’s departure and increasing competition from other giants such as IBM, which decided to enter the PC computers market. During this period, Apple faced number of challenges including:

• Unstable strategy due to the change of executive teams
• Unclear vision about Apple’s competitive strategy, especially after IBM entered the PC market
• Unclear vision about selling OS licenses, which would put the company in competition with Windows operating system
• Large number of failed products (such as Newton PDA) and few successful ones (such as PowerBook)
• Products not unique in the market
• Confusion and uncertainty among Apple consumers, resulting from this strategy

Design Thinking to Fuel Innovation

Apple is one of the leading companies in the field of innovation and this couldn’t have happened without the company adopting design thinking . Design thinking is a solution-oriented process that is used to achieve innovation with considerations about the consumer at the heart of all development stages. Tim Brown, president and CEO of IDEO, defines design thinking as follows: “ Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success. ”

“Most people make the mistake of thinking design is what it looks like. People think it’s this veneer — that the designers are handed this box and told, ‘Make it look good!’ That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.” — Steve Jobs

In previous design thinking articles, we explored the different models of design thinking including the IDEO model, d.school model, and IBM design thinking  model. Most of these models share the target of achieving innovation through three main factors:

User Desirability . The product should satisfy the consumer’s needs by solving everyday problems through a user-centered process. This can be achieved through a deep understanding of the user and through an empathic design process, which can only be achieved by putting ourselves in the shoes of our consumers (using tools such as an empathic persona map ).

Market Viability . Successful products require an integrated marketing strategy that identifies the target segment and builds the product brand in accordance with this target segment. Tools such as the business model canvas can help our understanding of the project and create a business strategy for it. Also, tools such as the SWOT analysis allows us to understand the strengths, weaknesses, opportunities, and threats of the specified product.

Technology Possibility . Technology provides state-of-art tools for designers to innovate and build products that meet today’s needs. Technology should be adopted through the development process, including the prototyping stage where a visual presentation of the product is made to the team.

Think Different!

After Steve Jobs returned to Apple in 1997 (upon Apple’s acquisition NeXT), he started to apply the design thinking characteristics discussed above, which reflected his vision for Apple products. The vision discussed below was used to form Apple’s strategy from 1997 until today. Steve Jobs applied design thinking by focusing on:

• People’s needs and desires, rather than only the needs of the business
• Building empathy by helping people to love Apple products
• The design rather than the engineering work; designers consider both the form and the function of the product
• Building simple yet user-friendly products rather than complex hard-to-use products

The vision characterized above can be clearly identified in modern Apple products. Although other competitors focus on the features and product capabilities, Apple focuses on a holistic user experience.  For example, the iMac is renowned for being quiet, having a quick wake-up, better sound, and a high-quality display. This vision was formed in Apple’s development strategy that includes:

Excellence in Execution

In this part, Steve tended to improve the execution process by closing 2 divisions, eliminating 70% of the new products and focusing on the higher potential products, reducing the product lines from 15 to just 3, and shutting facilities to move manufacturing outside the company. Apple also launched a website for direct sale of its products and started to take an interest in materials and how products are manufactured within a consumer-driven culture.

Platform Strategy

Apple streamlined their product portfolio to a family of products that can be produced  much more quickly while keeping the existing design elements. Also, the company targeted product that require less repair and maintenance.

Iterative Customer Involvement

The consumer experience should be integrated into the design and development stages through participating in usability testing. Also, the design for interfaces should focus on the user experience.

Beautiful Products

In addition to the function of the product, the form should beautiful, which can be achieved through continuous innovation and development. Apple also focused on the materials and manufacturing process and took a bold approach to trying new ideas rather than sticking with the ordinary design forms.

Apple’s history with innovation provides a clear lesson about how design and innovation can turn company failure to market success and a leading position in a competitive market. Design thinking helped Apple to innovate while placing their consumers at the heart of the process. The period that Steve Jobs was absent from Apple demonstrates that copying others and lacking a clear innovation strategy can lead companies directly from success to failure. On the other hand, innovation can definitely help build a successful business.

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Dr Rafiq Elmansy

As an academic and author, I've had the privilege of shaping the design landscape. I teach design at the University of Leeds and am the Programme Leader for the MA Design, focusing on design thinking, design for health, and behavioural design. I've developed and taught several innovative programmes at Wrexham Glyndwr University, Northumbria University, and The American University in Cairo. I'm also a published book author and the proud founder of Designorate.com, a platform that has been instrumental in fostering design innovation. My expertise in design has been recognised by prestigious organizations. I'm a fellow of the Higher Education Academy (HEA), the Design Research Society (FDRS), and an Adobe Education Leader. Over the course of 20 years, I've had the privilege of working with esteemed clients such as the UN, World Bank, Adobe, and Schneider, contributing to their design strategies. For more than 12 years, I collaborated closely with the Adobe team, playing a key role in the development of many Adobe applications.

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• International Marketing

Apple’s Global Strategy: Simplicity, Innovation, and Adaptability

• January 19, 2024
• LinkedIn 17

Table of Contents

Delving into apple’s global strategy, apple’s core values and the simplicity mantra, apple’s global branding strategy, apple’s global marketing strategy, case studies, apple’s global tax strategy.

• The Cornerstones of Apple’s Global Strateg

In the ever-evolving landscape of technology, Apple stands as a beacon of innovation and design, captivating consumers worldwide with its sleek products and user-centric approach. With a global presence spanning over 150 countries and an estimated $383.29 billion in revenue in 2023, according to Statista , Apple’s success is a testament to its astute global strategy , a harmonious blend of differentiation, adaptability, and unwavering commitment to quality.

Apple’s global strategy is rooted in the concept of “differentiation,” a strategic approach that sets it apart from its competitors. By consistently pushing the boundaries of innovation, Apple has carved a niche for itself, offering products that are not only technologically advanced but also aesthetically pleasing and user-friendly . This differentiation has allowed Apple to capture a loyal customer base and establish a strong brand identity across the globe .

Apple’s global strategy has evolved over time, adapting to the changing dynamics of the international market. In its early days, the company focused heavily on innovation, relentlessly pursuing cutting-edge technologies and groundbreaking designs. However, as the company matured, it recognized the importance of customer experience and began placing a greater emphasis on this aspect . Today, Apple’s global strategy is a seamless blend of innovation and customer focus, ensuring that its products and services align with the needs and preferences of consumers worldwide.

At the heart of Apple’s global success lies a set of core values that permeate every aspect of the company’s operations , from product design to marketing campaigns. These values, deeply rooted in the company’s identity, guide Apple’s approach to innovation, customer experience, and global expansion.

• Accessibility: Apple strives to make its products and services accessible to everyone, regardless of their physical or cognitive abilities. This commitment is evident in features like VoiceOver , which provides spoken feedback for visually impaired users, and AssistiveTouch , which allows users with limited mobility to control devices with gestures.
• Educational Support: Apple recognizes the transformative power of technology in education and actively supports initiatives that promote digital literacy and learning. The company’s initiatives include Apple Teacher certification programs, curriculum resources, and educational apps that enhance teaching and learning.
• Carbon Neutrality: Apple is committed to reducing its environmental impact and is working towards becoming carbon neutral by 2030 . The company has implemented numerous initiatives to minimize its carbon footprint, including transitioning to renewable energy sources, designing energy-efficient products, and recycling materials.
• Inclusive Work Environment: Apple is committed to creating a diverse and inclusive workplace where everyone is valued and respected. The company has implemented policies and programs that promote diversity hiring, provide equal opportunities for advancement, and foster a culture of inclusion.
• Privacy: Apple is a staunch advocate for user privacy and believes that individuals should have control over their personal data. The company has implemented robust privacy protections in its products and services, including encryption, data minimization, and transparency.
• Equity and Justice: Apple is committed to promoting equity and justice in its operations and throughout the world. The company supports initiatives that address social and economic inequalities, promotes human rights, and advocates for environmental sustainability.
• Supplier Responsibility: Apple is committed to ensuring that its suppliers adhere to high ethical standards and treat their workers with respect. The company has established stringent supplier codes of conduct and conducts regular audits to monitor compliance.

These core values, collectively, form the foundation of Apple’s global strategy. They guide the company’s product design, marketing campaigns, and customer service interactions , ensuring that Apple delivers products and experiences that are not only technologically advanced but also aligned with its values of simplicity, accessibility, and inclusivity.

Simplicity is a cornerstone of Apple’s design philosophy, evident in the clean aesthetics, intuitive interfaces, and user-friendly features of its products. This emphasis on simplicity has resonated with consumers worldwide , making Apple products accessible to a broad audience and fostering a loyal customer base.

By upholding its core values and embracing simplicity, Apple has not only achieved global success but also established itself as a role model for other companies seeking to build a sustainable and ethical business model.

Apple’s global branding strategy is a delicate balance of standardization and adaptation, ensuring that the company maintains a consistent brand identity while also resonating with consumers in diverse cultures and markets. On the one hand, Apple strives to project a unified brand image, conveying its core values of innovation, simplicity, and elegance across all its products, marketing campaigns, and customer interactions. This standardization helps reinforce Apple’s reputation for quality and consistency, fostering brand loyalty and recognition worldwide.

On the other hand, Apple recognizes the need to adapt its branding to local markets and cultures. This adaptability is evident in the company’s product offerings, marketing messages, and customer support. For instance, Apple has developed localized versions of its products with features and specifications tailored to specific regions . Additionally, the company’s marketing campaigns often incorporate cultural nuances and local references to connect with consumers on a deeper level.

Apple’s ability to balance standardization and adaptation has been a key factor in its global success. By maintaining a consistent brand identity, the company has built a strong foundation of brand recognition and loyalty . However, by adapting to local markets, Apple has been able to cater to the needs and preferences of consumers in different parts of the world, expanding its reach and deepening its customer base.

Examples of Apple’s Standardization

• Unifying Brand Elements: Apple employs a consistent design language across its products, including clean aesthetics, minimalist interfaces, and sleek silhouettes. This consistent visual language helps establish a cohesive brand identity.
• Global Marketing Campaigns: Apple’s marketing campaigns often feature universal themes of innovation, creativity, and personal empowerment, appealing to a global audience.
• Seamless Customer Experience: Apple’s customer support is available in multiple languages, and the company’s online store can be accessed in over 40 countries, ensuring a consistent experience for customers worldwide.

Examples of Apple’s Adaptation

• Localization of Products: Apple offers localized versions of its products, such as the iPhone and iPad, with features and specifications tailored to specific regions. For instance, the iPhone SE 2020 is optimized for Indian consumers with support for two SIM cards and regional cellular bands.
• Culturally Sensitive Marketing: Apple’s marketing campaigns often incorporate cultural nuances and local references to connect with consumers on a deeper level. For example, the company’s “ Shot on iPhone ” campaign features images captured by photographers from around the world, showcasing the diversity of visual storytelling.
• Localized Customer Support: Apple provides customer support in multiple languages and offers localized resources, such as online FAQs and tutorials, tailored to specific regions. The company also partners with local businesses to offer personalized support services.

Apple’s success in balancing standardization and adaptation is a testament to its understanding of the complexities of global branding. By striking this delicate balance, the company has been able to maintain a strong brand identity while also resonating with consumers in diverse markets , solidifying its position as one of the world’s most recognizable brands.

Apple’s global marketing strategy is a multifaceted approach that revolves around four key pillars: wide acceptance, brand value, competitive advantage, and low imitation . These pillars are intertwined, working together to propel Apple’s success in the global marketplace.

Wide Acceptance

Apple’s products have achieved widespread acceptance worldwide, attracting a loyal customer base across diverse demographics and regions . This widespread appeal is attributed to several factors, including:

• Innovative Designs: Apple consistently pushes the boundaries of design, creating products that are both aesthetically pleasing and user-friendly. The company’s sleek, minimalist aesthetic has become synonymous with Apple’s brand identity.
• User-Friendly Interfaces: Apple’s products are renowned for their intuitive interfaces, making them easy to navigate and use for people of all technical backgrounds.
• Effective Marketing Campaigns: Apple’s marketing campaigns are known for their creativity and emotional appeal, resonating with consumers on a personal level. The company often uses storytelling and cultural references to connect with diverse audiences.

Brand Value

Apple has built a strong brand value over the years, characterized by perceptions of quality, innovation, and premium craftsmanship . This brand value has been instrumental in attracting consumers and fostering brand loyalty.

• Reputation for Quality: Apple is consistently rated among the most reliable and durable consumer electronics brands. This reputation for quality has earned the company a loyal following among consumers who value long-lasting products.
• Innovation: Apple is renowned for its pioneering spirit, consistently introducing innovative products that redefine the technological landscape. This focus on innovation has helped maintain Apple’s cutting-edge reputation and attract early adopters.
• Premium Branding: Apple’s products are positioned in the premium segment of the market , commanding higher prices than its competitors. This premium positioning contributes to the company’s brand value and reinforces its image as a luxury brand.

Competitive Advantage

Apple maintains a competitive advantage in the global market through a combination of factors, including:

• Strategic Product Differentiation: Apple differentiates its products from competitors through unique features, design elements, and user experiences. This differentiation strategy has helped the company carve out a distinct niche in the market.
• Focus on Customer Experience: Apple prioritizes customer satisfaction, creating a seamless and personalized experience for its users. This focus on customer experience has helped foster brand loyalty and attract new customers.
• Global Retail Presence: Apple has a strong global retail presence, with over 500 stores in 23 countries, as per Statista . This extensive retail network provides consumers with easy access to Apple products and services.

Low Imitation

Despite facing intense competition from numerous technology giants, Apple has been able to maintain a relatively low level of imitation . This is due to several factors, including:

• Continuous Innovation: Apple’s relentless pursuit of innovation makes it difficult for competitors to replicate its products and services.
• Strengthened Intellectual Property Protection: Apple has a robust intellectual property portfolio, providing legal protection for its innovative designs and technologies.
• Brand Loyalty: Apple’s loyal customer base is less susceptible to imitation, as they are often willing to pay a premium for Apple products due to their brand loyalty and trust in the company.

Apple’s successful global marketing strategy is a testament to its ability to balance innovation, brand value, competitive advantage, and low imitation. By consistently delivering high-quality products, cultivating a strong brand reputation, and prioritizing customer experience, Apple has cemented its position as one of the world’s leading technology companies .

Apple’s remarkable global success is evident in its ability to penetrate and dominate markets as diverse as China and India. These two countries represent two of the world’s most populous and rapidly growing economies, offering significant opportunities for technology companies. Apple’s success in these markets is a testament to its ability to adapt its global strategy to local conditions and preferences .

China has become Apple’s second-largest market , with over 190 million active iPhones in use as of 2023 ( Statista , 2023). Apple’s success in China can be attributed to several factors, including:

• Pricing Strategy: Apple has adopted a tiered pricing strategy in China, offering a wider range of products at lower price points to cater to a broader range of consumers.
• Distribution Channels: Apple has established a strong network of authorized resellers and retail stores in China, making its products readily available to consumers across the country.
• Partnerships with Local Businesses: Apple has partnered with Chinese telecommunications companies, e-commerce platforms, and content providers to expand its reach and customer base.
• Localization: Apple has made sure to localize its products , marketing campaigns, and customer support for the Chinese market, ensuring that they resonate with local consumers.

Despite facing challenges such as piracy and counterfeiting, Apple has successfully established itself as a premium brand in China . The company’s commitment to innovation, design, and customer experience has resonated with Chinese consumers, who are increasingly embracing technology.

India is another key market for Apple, with a growing middle class and increasing smartphone penetration. Apple’s strategy in India has focused on tailoring its products and services to the specific needs and preferences of Indian consumers .

• Price Sensitivity: Apple has introduced more affordable iPhone models in India, such as the iPhone SE, to attract price-conscious consumers.
• Online Sales: Apple has heavily invested in its online presence in India, making it easier for consumers to purchase its products online.
• Partnerships with Local Businesses: Apple has partnered with Indian e-commerce platforms, mobile carriers, and banks to expand its distribution reach and payment options.
• Localization: Apple’s localization strategy for the Indian market has included the adaptation of its products, marketing campaigns, and customer support, including the development of Hindi-language versions of its software.

Apple’s success in India has been gradual but steady. The company has faced challenges such as competition from local smartphone brands and a lack of brand recognition in rural areas. However, Apple’s commitment to innovation and adaptation has helped it gain traction in this emerging market .

Apple’s global success has been accompanied by scrutiny over its tax practices, particularly its use of a subsidiary company in Ireland to minimize its global tax liability. This strategy, known as “ Double Irish with a Dutch Sandwich ,” has allowed Apple to shift profits offshore, effectively reducing its tax payments in the United States and other countries .

While Apple has defended its tax strategy, arguing that it complies with all applicable laws, it has faced criticism from governments, tax experts, and consumer advocacy groups . Critics argue that Apple’s tax practices amount to corporate tax avoidance, depriving governments of revenue that could be used for public services.

Advantages of Apple’s Tax Strategy

Apple’s tax strategy has several potential advantages for the company, including:

• Reduced Tax Burden: By shifting profits offshore, Apple can effectively reduce its tax payments, which can boost its profitability and financial returns to shareholders.
• Increased Competitiveness: Lowering tax costs can give Apple a competitive advantage over other companies, allowing it to invest more in research and development, marketing, and product development.
• Enhanced Shareholder Value: By reducing its tax burden and increasing profitability, Apple can improve its financial performance and boost shareholder value.

Disadvantages of Apple’s Tax Strategy

Apple’s tax strategy has also been criticized for several potential disadvantages, including:

• Public Image Concerns: Apple’s tax practices have tarnished its public image, raising concerns about corporate social responsibility and ethical behavior.
• Legal Challenges: Governments and tax authorities around the world have been investigating Apple’s tax strategy, and the company faces potential legal challenges that could lead to fines and penalties.
• Political Fallout: Apple’s tax practices have created political tensions, with some countries considering imposing stricter tax laws to prevent multinational corporations from shifting profits offshore.

A Balancing Act

Apple’s global tax strategy has been a source of controversy, highlighting the delicate balance between corporate profitability and societal responsibility . While the company may benefit financially from its tax practices, it also faces reputational risks and potential legal repercussions. Apple must carefully navigate this complex landscape to maintain its global success while addressing concerns about its ethical conduct.

The Cornerstones of Apple’s Global Strategy

Apple’s journey to becoming one of the world’s most recognizable and successful companies is a testament to its ability to balance simplicity, innovation, and adaptability. From its early days as a niche computer manufacturer to its current status as a global technology powerhouse, Apple has consistently demonstrated its knack for understanding and meeting the evolving needs of consumers worldwide .

Apple’s core values, particularly its emphasis on simplicity, have permeated every aspect of its business. The company’s products are renowned for their user-friendly interfaces and intuitive designs , making them accessible to a wide range of users, regardless of their technical expertise. This commitment to simplicity extends to Apple’s marketing campaigns, which often use storytelling and emotional appeals to resonate with consumers on a personal level.

Apple’s unwavering focus on innovation has been another driving force behind its global success. The company has consistently pushed the boundaries of technology, introducing groundbreaking products that have transformed the way people interact with the digital world . From the revolutionary iPhone to the sleek AirPods, Apple has consistently redefined the standards for innovation in the technology industry.

Alongside innovation and simplicity, Apple has also demonstrated remarkable adaptability in its global expansion . The company has successfully tailored its products, marketing strategies, and customer support to suit the unique needs and preferences of different cultures. This adaptability has been crucial in Apple’s ability to penetrate and dominate markets as diverse as China and India, where local competitors pose significant challenges.

Apple’s approach to globalization is not without its critics. The company’s tax strategy, which has been the subject of intense scrutiny, has raised concerns about corporate social responsibility and ethical behavior. As Apple continues to expand its global footprint, it will need to address these concerns and demonstrate its commitment to operating responsibly and ethically in all the markets it serves.

Looking to the future, Apple faces a number of challenges and opportunities. The company will need to continue to innovate and adapt to the ever-changing technological landscape . It will also need to navigate the complexities of global markets, ensuring that its products and services remain relevant and appealing to consumers worldwide.

Apple’s journey to global success is a compelling case study in how a company can build a strong brand and establish a lasting presence in the international arena. By embracing simplicity, innovation, and adaptability, Apple has demonstrated that it has the vision and resilience to continue to thrive in an increasingly competitive and interconnected world .

As Apple embarks on the next chapter of its global journey, it remains to be seen how the company will navigate the evolving landscape of technology, consumerism, and globalization. However, one thing is certain: Apple’s commitment to innovation and its ability to understand the needs of consumers worldwide will continue to be key drivers of its success in the years to come.

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Apple’s Product Development Process – Inside the World’s Greatest Design Organization

Apple’s Product Development Process may be one of the most successful design processes ever implemented. With a valuation that exceeds $2 trillion, there’s a lot that designers can learn from Apple and introduce into their own design environments.

Apple is a notoriously secretive business. In Steve Jobs’ time at the company it would have been near impossible to find out about the internal workings of the business. This isn’t surprising when a business’s market advantage is its design approach. It’s worth keeping it under wraps.

However, Adam Lashinsky, the author of Inside Apple: How America’s most Admired and Secretive Company Really Works has been given a look at the process. While there are still aspects of the way that Apple works that are shrouded in secrecy , you can get a good idea of the overall high level process through this book. And in this article, we’ve distilled the key takeaways from the book.

Apple’s Product Development Process

Design is at the forefront.

Author/Copyright holder: GiuliaPiccoliTrapletti . Copyright terms and licence: CC BY-SA 4.0

How do you give designers the freedom to design and ensure that the products they produce fulfil their visions? Well at Apple they put design at the forefront.

Jony Ive, the British designer who was the Chief Design Officer (CDO) at Apple, and his design team do not report to finance, manufacturing, etc. They are given free rein to set their own budgets and are given the ability to ignore manufacturing practicalities.

At the heart of the design department is the Industrial Design Studio where only a select few Apple employees have access.

It’s a simple concept that allows for the creation of incredible products.

Design Teams are Separated From the Larger Company

When a design team works on a new product they are then cut off from the rest of the Apple business. They may even implement physical controls to prevent the team from interacting with other Apple employees during the day.

The team is also removed from the traditional Apple hierarchy at this point. They create their own reporting structures and report directly to the executive team. This leaves them free to focus on design rather than day-to-day minutiae.

A Documented Development Process

Author/Copyright holder: Ed Uthman . Copyright terms and licence: CC BY-SA 2.5

The Apple New Product Process (ANPP) information is given to a product development team when they begin work. It details every stage of the design process and it goes into elaborate detail. The idea is to define what stages the product creation team will go through, who will be responsible for delivering the final product, who works on which stage and where they work and also when the product is expected to be completed.

Monday is Review Day

The Apple Executive Team holds a regular Monday meeting to examine every single product that the company has in design phase at that point in time. This isn’t as daunting as it may sound; one of the keys to Apple’s success is that they don’t work on hundreds of new products at once. Instead, resources are concentrated on a handful of projects that are expected to bear fruit rather than being diluted over many lesser projects.

If a product cannot be reviewed at one meeting – it’s automatically at the top of the agenda for the next meeting. In practice, this should mean that every single Apple product is inspected by the executive team at least once a fortnight. This keeps delays in decision making to a minimum and enables the company to be very lean with its approach to design.

The EPM and the GSM

The EPM is the engineering program manager and the GSM is the global supply manager. Together they are known within Apple as the “EPM Mafia”. It’s their job to take over when a product moves from design to production.

As you might expect, these people are usually going to be found in China, Apple does very little of its own manufacturing. Instead it relies on contract outsourcing companies like Foxconn (one of the largest employers in the world) to do this for them. This removes much of the headache of manufacturing for Apple whilst keeping production costs as low as possible. There is a significant market advantage to this approach and its one that many other electronics manufacturers are emulating now.

The EPM Mafia may sound scary (and they probably are to the suppliers) but their real job is simply to ensure that products are delivered to market in the right way, at the right time and at the right cost. They may disagree at points but their guiding principle is to act in the interests of the product at all times.

Iteration Is Key

Like any good design company , the design process at Apple is not over when manufacturing begins. In fact, Apple iterates the design throughout manufacturing. The product is built, it’s tested and reviewed, then the design team improves on it and it’s built all over again. These cycles take 4-6 weeks at a time and may be run many times over a product’s development lifecycle.

Author/Copyright holder: CyberDoc LLC . Copyright terms and licence: Fair Use.

When production is complete the EPM will take possession of some or all of the test devices and then take them back to Apple’s headquarters at Cupertino.

This is a very costly approach but it’s one of the reasons that Apple has a reputation for quality. The more you invest in design, the more likely you are to build incredible market changing products. It’s the process that the iPod, the iPhone and the iPad went through.

The Packaging Room

This is a very-high security area in Apple and it’s where prototypes are unboxed. As you might expect, the security is to prevent leaks to the outside world. If you ever do see a leaked prototype for an Apple product – it won’t have come from here. It’s more likely to have vanished from a production line in China.

A Launch Plan

Author/Copyright holder: Manutaus. Copyright terms and licence: CC BY-SA 3.0

The final step in Apple’s product development is product launch. When the product is considered to be as good as it can be – it enters an action plan known as “the Rules of the Road”. This explains all the responsibilities and actions that must be taken prior to a commercial launch of the product.

It must be a nerve-wracking experience to be privy to the “Rules of the Road” because if you lose it or leak it… you’re immediately fired. This is explained in the document itself.

The Take Away

Apple’s process is complex, expensive and demanding. If you compare it to most business theories – it shouldn’t work. However, to date it has out-performed even the wildest of expectations.

You may not be able to emulate all of their processes within the space of your own workplace but there’s no reason that you can’t develop written processes for design phases and launch phases of your projects, for example. And, of course, there is no reason at all for you in not iterating!

The more you know about successful design processes, the more you can take some of the best aspects of them and use them to enhance your own products.

Find out all the details of the design process in: Inside Apple: How America's Most Admired--and Secretive--Company Really Works by Adam Lashinsky ISBN 97814555512157, Published January 25, 2012

And take an insight into Apple’s greatest designer’s mind in : JonyIve: The Genius Behind Apple's Greatest Products by Leander Kahney ISBN 159184617X, Published November 14, 2013

Hero Image: Author/Copyright holder: Sreejithk2000. Copyright terms and licence: Public Domain.

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Describes Apple's approach to innovation, management, and design thinking. For several years, Apple has been ranked as the most innovative company in the world, but how it has achieved such success…

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Describes Apple's approach to innovation, management, and design thinking. For several years, Apple has been ranked as the most innovative company in the world, but how it has achieved such success remains mysterious because of the company's obsession with secrecy. This note considers the ingredients of Apple's success and its quest to develop, in the words of CEO Steve Jobs, insanely great products. Focuses on: 1) design thinking; 2) product development strategy and execution; 3) CEO as chief innovator; and 4) bold business experimentation.

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Managing innovation.

Jan 9, 2009 (Revised: May 1, 2012)

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How Apple Achieved a Legendary $2.98 Trillion Fortune by Outsourcing | Case Study

In the annals of technological innovation, Apple Inc. stands as a testament to what strategic decisions and visionary leadership can achieve. From its humble beginnings in a garage to becoming a three trillion-dollar behemoth, Apple’s success narrative is a tale woven with threads of innovation, design excellence, and a shrewd approach to outsourcing. In this extensive case study, we embark on a journey to dissect the intricate layers of outsourcing strategy to extract valuable lessons for businesses aiming at sustainable growth.

Apple’s evolution is a saga of perpetual reinvention. Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, the company started as a player in the personal computer industry. [ 1 ] Fast forward to the present day, and Apple Inc. has transformed into a global powerhouse, setting industry benchmarks and captivating consumers with its innovative products.

Table of Contents

#1: outsourcing: apple inc.’s manufacturing backbone, a: challenge: scaling up production.

As Apple Inc. ventured into the realm of consumer electronics with products like the iPhone, iPad, and MacBook, the challenge of meeting unprecedented demand emerged. In response, Apple strategically embraced outsourcing, forging key partnerships to tackle this manufacturing conundrum.

Foxconn, also known as Hon Hai Precision Industry Co., Ltd., emerged as Apple’s manufacturing linchpin. With its headquarters in Taiwan, Foxconn became the largest electronics contract manufacturer globally. The statistics tell a compelling story—Foxconn’s revenue in 2021 reached a staggering $214 billion, ranked 20th in the 2023 Fortune Global 500—a significant portion of which was attributed to its collaboration with Apple.

B: Benefit: Cost Savings and Efficiency

The outsourcing strategy wasn’t merely about meeting demand but a calculated move to optimize costs. According to industry reports, the cost of manufacturing an iPhone X was estimated to be around $370, with the device retailing at $999. This exemplifies the cost-effectiveness achieved through outsourcing, particularly with partners like Foxconn, renowned for their efficiency in mass production. In 2023, Apple Inc. launched the titanium-based iPhone 15 Pro Max, manufactured at $558 and currently retailing from $1199 to $1599.

#2: Leveraging Global Talent and Expertise

A: challenge: the pursuit of excellence.

Apple’s commitment to excellence extends beyond its sleek product designs to encompass the entire user experience. To provide this seamless experience, Apple Inc. strategically tapped into a global talent pool, seeking specialized expertise through outsourcing.

Beyond manufacturing, Apple’s collaboration extended to specialized components. For instance, Apple Inc. sourced its A-series chips from Taiwan Semiconductor Manufacturing Company (TSMC), a world leader in semiconductor manufacturing. In 2022, TSMC’s revenue soared to $63 billion, a testament to its pivotal role in Apple’s supply chain.

B: Benefit: Innovation and Quality Assurance

Outsourcing to experts meant that Apple could integrate cutting-edge technology seamlessly. The A-series chips, fabricated by TSMC, consistently pushed the boundaries of performance, ensuring that Apple’s devices were aesthetically pleasing and technological marvels. This collaborative approach contributed to Apple’s reputation for innovation and quality assurance.

#3: The Design Imperative

A: challenge: nurturing creativity.

Apple’s design philosophy is synonymous with elegance and innovation. Outsourcing became a tool to liberate internal resources, allowing Apple’s design team to focus solely on what they do best—creating iconic products.

By outsourcing components and manufacturing, Apple’s in-house design team gained the freedom to innovate without being bogged down by production intricacies. Statistics reveal the impact—Apple’s design-led approach contributed to a brand value of $263.4 billion in 2022, making it the most valuable brand globally.

B: Benefit: Unleashing Creativity

This focus on design resulted in visually stunning products and fostered a culture of innovation within Apple Inc. The iPhone’s iconic design, for instance, not only captured the market but set a new standard for the entire industry. The freedom to innovate became a catalyst for Apple’s success.

#4: Outsourcing in the Digital Age

A: Challenge: Navigating the Digital Landscape

As the digital landscape evolved, Apple Inc. faced the challenge of staying at the forefront of software development. The solution lies in strategic outsourcing partnerships that complement Apple’s internal capabilities.

Apple’s collaboration extended to software development, with partnerships and acquisitions reinforcing its commitment to excellence. For instance, the acquisition of Beats Electronics in 2014 for $3 billion not only bolstered Apple’s presence in the audio industry but also brought the expertise of Beats’ software engineers into the Apple ecosystem.

B: Benefit: Software Synergy

Outsourcing software development allowed Apple to harness the collective expertise of a global talent pool. The collaborative synergy translated into user-friendly interfaces, seamless integration across devices, and a robust app ecosystem. The strategic outsourcing of software development became a key ingredient in Apple’s recipe for success in the digital age.

#5: Ethical Considerations and Corporate Responsibility

A: challenge: balancing success and responsibility.

While the outsourcing strategy contributed significantly to Apple’s success, it also brought attention to ethical considerations and corporate responsibility. Reports of challenging working conditions at some manufacturing partners prompted Apple to reevaluate its approach.

Apple’s response to these ethical concerns showcased adaptability and a commitment to responsible business practices. According to Apple’s Supplier Responsibility Progress Report in 2022, the company conducted over 1,100 supplier assessments, addressing issues related to labor practices, environmental impact, and ethical sourcing.

B: Benefit: Ethical Leadership

Addressing ethical concerns associated with outsourcing elevated Apple’s corporate image. The commitment to responsible business practices resonated with consumers and set a precedent for the industry. This ethical leadership became a crucial element in Apple’s success story.

Final Verdict: The Outsourcing Symphony

In the grand symphony of Apple’s success, outsourcing plays a pivotal role as a harmonious melody that elevates the entire composition. The strategic outsourcing of manufacturing, expertise, design, and software development has propelled Apple to unprecedented heights and is currently worth almost $3 trillion. This in-depth exploration attests to the transformative power of strategic outsourcing.

* Lessons Learned: A Call to Action

1. Strategic Partnerships : Identify and cultivate strategic outsourcing partnerships that align with your business goals and values. Partnering with industry giants like Foxconn and TSMC gave a solid foundation.

2. Focus on Core Competencies : Outsourcing allows you to concentrate on your core competencies, whether design, innovation, or marketing. As exemplified above, streamlining the design process can lead to market-leading products.

3. Global Talent Pool : Tap into a global talent pool to access specialized expertise and stay at the forefront of innovation. Partnerships with global leaders, such as TSMC in semiconductor manufacturing, were proven to be instrumental.

4. Ethical Outsourcing : Prioritize ethical considerations and corporate responsibility in your outsourcing practices to build a positive brand image. As demonstrated above, regular assessments and a commitment to transparency can set industry standards.

5. Adaptability : Be adaptable and responsive to challenges, iterating your outsourcing strategy to meet evolving demands. Responsiveness to ethical concerns showcases the importance of adaptability in sustaining success.

In the business landscape, the outsourcing symphony can be the key to sustained success. As businesses consider their growth strategies, the above case study serves as a compelling testament to the transformative power of strategic outsourcing. Embrace the symphony, conduct it with precision, and let the echoes of success reverberate through the corridors of your organization.

Get in touch with us at CodersOnFire and start outsourcing your software development projects to gain monumental success in your business.

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Home » Management Case Studies » Case Study of Apple: Competitive Advantage Through Innovation

Case Study of Apple: Competitive Advantage Through Innovation

Apple Inc. is an American consumer electronic company which designs, develops manufactures and supports the well-known hardware products such as Macintosh computers, the iPod, the iPhone and the iPad. Most of Apple’s products seem to be a trigger of revolution in electronic market and this reason contribute Apple as a market leader . The main strategy to run its business is not only creating new innovation product but also incremental improvement . The strength of Apple is “think different” . With innovative ideas and aesthetic designs, Apple has changed how people listen to music and communicate . One of the success products of Apple is iPhone which is a revolutionary device. It combined the feature of music device (iPod) and mobile phone technology with the key feature on this product that is “multi-touch” and “multi-tasking” on the graphic user interface. The phone supports a camera, a multimedia player, a blue tooth, web browsing and internet connectivity. However, the price of iPhone is higher than other mobiles in the market and the aim is targeting a niche market. From this reason, iPhone faced with various challenge to get market share and compete with existing player in the mobile market. With innovation and unique features that is the selling point, iPhone sustains this competitive advantage by continue development and create the new innovation with its best.

Apple is one of the success innovation companies by the evidence with the first rank of ‘the 50 Most Innovative Companies’ in 2009. From the success innovation product with $9.87 billion profit for 2009, it seems to be motivator for other companies to aware of innovation factor. Moreover, Apple emphasizes its successful innovation device with “iPad” which is touch-screen device to use the Internet for research applications, listen to music, movies and games. A lot of buzz occurred and attract attention from consumer immediately when product launch in the first quarter 2010. This is another evident that shows the success innovative product of Apple. The question of how Apple success in innovation product be concerned from others.

Key Drivers for Innovation for Apple

The first key Apple’s innovation driver is consumers’ needs. It is not only to put new technology into its products, but also the great new design that focuses on needs of user. Introduce high technology within the products that easy to use is what Apple always successfully done. The Macintosh computer, one of the core products of Apple, comes with “mouse’ that is easy to navigate around the whole screen for user. The iPod introduces itself as a music player with the way to transfer and organize music is simple enough for anyone to use which is how the perfect product should be. Its click wheel simple the way user can make a quick scan through thousands of songs. As well as for the iPhone, even though it is not the first smartphone which integrated by music player, camera, web browser and email. It removes the tiny buttoned keyboards with the button-less touch screen and put almost everything in fingertips. Significantly, it ensures that the customer needs not to be smart to use a smartphone. The concepts of innovative user interface with easy to use is what Apple put as one of the most important features for its user. It is a key driver for innovation within electronic consumer. Moreover, Apple has own retail stores that is easier to access customer and get direct feedback. That is the Apple strategy to understand actual consumers’ needs and apply them for the new innovation product.

The next innovation driver that makes iPhone getting more attractive from user than others is the competitive environment. From the intense competitive environment in mobile market, it drives Apple to develop the better product continuously. Moreover, the high expectation of customer motivates Apple to create the next best thing in order to keep the customers’ loyalty that get from previous products and attract to the new customers. When iPhone launch to the market, it received the great response from customers with the average number of selling 20,000 units per days in the first 200 days. Furthermore, Apple got 19.5% of market share in the first quarter, RIM got the most.

Finally, economic is the key innovation driver. The performance of people in corporations is higher and productivities of products are quite similar. Economy factor pushes companies to have more innovation. For example, fast growth economy likes United State, there is the country where a half of companies in ‘the 50 most innovation companies ranking’, have the headquarters in. Companies try to hire employee who has more creativity and imagination that seem to be the core competency to generate high growth revenue. Business week said “Apple CEO Steve Jobs has turned Apple into the paragon of the creative corporation, and with the evolution of the economy toward creativity underway, companies throughout the world are de-constructing Apple’s success in design and innovation”. Moreover, capability of consumers’ purchasing in economy nowadays is higher. Consumers be able to accept on expensive innovative product that it is easier for company to invest money on R&D and apply higher technology for the innovation product with less concerned on cost.

Strategic Enablers within Apple

The first enabler is the leader, Steve Jobs who is CEO of Apple and co-founded in 1976. He said “Innovation distinguishes between a leader and a follower”. From this idea, he thought that the innovation is the key to get competitive advantage . Jobs said that the best work always come from the best people working. He realized that the only way to do great work is to love what you do. This human resources strategy forms the basis for innovation idea. Finding and fostering people who is the talent in innovation is one of the four principles that drives innovation. The CEO is the key involvement in determining direction and goal of company. In 1997, Jobs became CEO of Apple and bring technologies from NeXT that was purchased by Apple into Apple products especially NeXTSTEP technology that was evolved in Mac OS X. He was the first to see the potential of Graphical User Interface and apply graphic into computer interface. Since then, appealing designs and powerful branding have worked . After that, Apple has been operated by Jobs as CEO.

Jobs started his responsibility in CEO position by reorganizing company. He focused on small group of products such as desktop and portable Macintoshes and eliminated 15 from 19 company’s products (such as printer, scanner and portable digital assistants). Then, he laid off a thousand of worker, closed plant and receiving cash $150 million by exchange stock. He focused on creating popular computer that retailed with the price less than $2,000 and then iMac was created. iMac is unique style desktop computer. This became the first success of Jobs after moving back to the company. Jobs noted “during first 139 days, an iMac was sold every 15 seconds of every minute of every hour of every day and every week”. From this result, it effect to company to get a profit once again with number of selling 800,000 units in the first five months.

The organisation culture was changed within Apple, it geared towards more creativity. Apple’s success cannot be measured by revenue or award but that is company’s culture of innovation which exists as an incubator for a long term impact. Jobs said that his job is pull thing together from different part of company and get the great resource for the key project. Although Jobs configure the company direction, employee team in Apple is also important equally. They play in a role of delivering innovation successful and human resource department must ensure that workers are active and understand the company direction. Spurring employees to think different and motivating their idea by atmosphere can encourage more creativity. Technology Business Research (TBR) supported that culture innovation allows Apple to outstanding perform then lead to increase market share and stay profitable.

The second enabler is intangible resource base including process and structure in organization. That is one of the root causes why Apple’s products are differentiated from others competitors . The tangible resources of Apple are quite similar with general IT companies but apply it to new innovation such as raw material of product, office layout and company location. Apple does not build the first computer or the first phone but Apple try to create the best at all of those. It is seen to be copying but if spending more time to research and apply it with new innovation in design or combining technology, it can come out with strong products. It can be able to convince consumers that this is the best thing out there like what Apple did. The tangible resource of Apple is intellectual of development team who is the smartest people and the best talent. The main success of it is unlocking innovation and dreaming ability of R&D team. iSuppli disclosed that from analysis, the bill of material (BOM) cost of 3GS iPhone is estimated $178.96 for 16 GB. The price of this model in the market is more than twice ( £450 in UK.). The selling price need to be included the cost of intellectual and innovation from development team that is the reason why consumer are acceptable in this price. Another evidence, that reflect the Apple’s capability translating great idea to product, is return of equity (ROE) by 20.9%. However, capability of workforce in Apple is not specific only creating innovation computer but also break into entertainment product as iPod in 2001 and then communication product as iPhone in 2007.

Apple enables intangible and tangible resource to the products and services through an innovation process in order to develop capability.

Strategic Blockages within Apple

Obstacles to sustain innovation of Apple have been avoided except LISA project. Apple developed Local Integrated Software Architecture or “LISA” to be a personal computer in 1983. It was a more advanced and far more expensive system ($9,995 in 1983). It was created too complex that its inclusion of protected memory, sophisticated hard disk, cooperative multitasking and so on. From this reason, LISA turned to be a commercial failure. LISA is a mistake of Apple that LISA was complex product with unnecessary extras and without understanding actual consumers’ needs. However, Apple develops other products by avoiding this pitfall and avoids developing products which out of the line with core value. Its core products are iPod, iPhone, Mac laptop and Mac desktop and get its best-ever performance in last quarter with net quarterly profit of $3.38 billion. From enormous success of these core products, it may be the maturity phase in product life cycle (the highest selling period) especially iPhone because it launched the first model since 2007 and it was developed in many versions. From this reason, it seems to be obstacle if Apple will develop a new innovation model that better than iPhone and create by keeping the key concept of ‘easy to use’ and ‘customer needs’. If the new product is not success, it may impact on its financial because iPhone created big revenue with selling 8.7M units in the last year quarter. The next obstacle is core competency of resource. The intellectual of development teams do not focus and develop on high performance product. Therefore, target consumer is limited in niche market that satisfies in this kind of product. Another obstacle is product limitation. For instance, Mac laptop/desktop is less flexibility than other products in the market (with the same kind). Consumer cannot change hardware which is more suitable with their work. Moreover, consumers may have some problem with software that need compatible with Macintosh operation system.

Related posts:

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Product Life Cycle (PLC) | Stages and Case Study of Apple

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What is Product Life Cycle (PLC)?

Product Life Cycle (PLC) is a model that illustrates how a product progresses through stages during its time on the market. It serves as a tool for businesses to understand how their products evolve and how to manage them efficiently. This concept plays a role in making decisions regarding product development, marketing strategies, pricing strategies, and distribution channels. In today’s paced world of business and innovation, it is crucial to grasp the Product Life Cycle (PLC).

Table of Content

Stages of Product Life Cycle (PLC)

Case study of product life cycle of apple, key takeaways from product life cycle (plc):.

• The PLC is a concept in marketing and product management that helps businesses plan strategically and make informed decisions about their products.
• This cycle represents the stages that a product goes through starting from its introduction to its decline in the market.
• Understanding these stages allows companies to adapt their strategies effectively maximizing profits and ensuring long-term success for their products.

1. Introduction

The introduction stage signifies the entry of a product into the market. The initial stage is typically associated with an increase in sales since it involves introducing the product to consumers. During this phase, businesses incur expenses for marketing and research and development (R&D) as they strive to raise awareness and stimulate demand for their product. Companies need to invest in marketing and create distribution channels to ensure that their product is easily accessible to customers. The objective is to establish a presence in the market and generate interest. During this phase, pricing strategies often revolve around two approaches:

• Penetration pricing, where a lower price is initially offered to gain market share,
• Skimming pricing, where a higher price is charged at first to recover development costs.

The growth stage witnesses a surge in sales as consumers become more aware of the product’s existence and its advantages. This growth is fueled by word-of-mouth favourable reviews and effective marketing campaigns. In this phase, businesses strive to expand their market share by scaling up production and distribution. With the increasing demand, competition may intensify as new players try to capitalise on the opportunity. As the product gains recognition, pricing strategies might shift towards a competitive approach. Companies may also introduce variations or extensions of the product aimed at market segments.

3. Maturity

The maturity stage represents the peak of sales and market penetration for the product. Competition typically reaches its point during this period, and attention shifts from attracting customers to retaining existing ones. Price stability and product differentiation become a feature of this stage. Ongoing marketing endeavours aimed at maintaining both market share and brand loyalty. Companies frequently make investments in improving their products, adding features, and implementing marketing campaigns to ensure their products remain relevant and competitive. Furthermore, they may explore opportunities in markets.

In the decline phase, sales of the product start to decrease due to changing consumer preferences, market saturation, or the emergence of alternatives. Companies must decide whether to discontinue the product or continue selling, it with marketing efforts. As existing inventory price reductions or discounts may be necessary, some companies may choose to reinvent or rebrand the product or find markets to extend its life cycle. Ultimately, the decision to withdraw or revive the product depends on its profitability and how well it aligns with the company’s strategy.

Introduction Phase

During the phase from 2007 to 2008, Apple introduced the iPhone, which brought about a significant transformation in the smartphone industry. To generate awareness and create excitement surrounding their product, Apple invested heavily in marketing and promotional activities. The innovative design and user-friendly interface of the iPhone captured the interest of tech enthusiasts. Capitalising on this wave of enthusiasm, Apple implemented a pricing strategy that involved charging prices initially.

Growth Stage

In the years that followed from 2009 to 2012, the iPhone experienced growth. Apple expanded its range of offerings by introducing models like the iPhone 3G, 4, and 4S. The launch of the App Store in 2008 played a role in fueling this growth by creating an ecosystem that catered to both developers and users alike. To meet increasing demand, Apple focused on scaling up production and distribution, while establishing partnerships with telecom carriers worldwide. Product differentiation also played a role during this stage as Apple offered storage capacities and introduced new features such as improved cameras and faster processors.

Maturity Phase

By 2013, the iPhone had reached maturity as it faced competition from Android-based smartphones. The market became saturated with options for consumers to choose from. To keep its position in the market, Apple put a lot of emphasis on improving its products. Released a series of iPhones, including the 5, 6, 7, and 8 models. They also introduced the Plus and SE versions. Alongside this, Apple carried on with its marketing campaigns that aimed to build brand loyalty and make sure customers were satisfied. Moreover, they expanded into markets, which helped solidify their position as a leading smartphone company.

Declining Stage

In years (2019 onwards), the iPhone entered a stage of decline where it faced obstacles, like market saturation and the rise of competitors. To tackle these challenges, Apple has adjusted its pricing strategies and introduced the affordable iPhone SE. Additionally, the company has heavily invested in services, like Apple Music, Apple TV+, and Apple Arcade to diversify its revenue streams and keep customers engaged. By focusing on refreshing its products and building an ecosystem around its devices, Apple has been able to prolong the lifespan of the iPhone and minimize the impact of market decline.

The Product Life Cycle (PLC) is a framework that helps businesses navigate their product’s complex journey in the market. By understanding the four stages of introduction, growth, maturity, and decline, companies can make choices regarding product development, pricing, marketing, and distribution. Effectively managing a product throughout its life cycle can lead to success and a competitive advantage in today’s dynamic business environment.

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Apple innovation; a case study

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TODD A FINKLE

The primary issues in this case involve business startup and management, and are appropriate for entrepreneurship and management courses. A secondary issue demonstrates how personal drive and motivation are critical components of successfully managing and growing a business, thereby making this case appropriate for discussion on the topic of strategic management. The case chronicles the life and passion of entrepreneur, Steve Jobs – illustrating the rise, fall, and current state of the Apple Computer Company. The purpose of this case is to illustrate how individual passion, determination, and innovation is a critical element in business start up success and also to stimulate critical thinking in terms of future direction for a company in a struggling economy.

Dr. İbrahim Atakan Kubilay

Apple Corporation is one of the most profitable, and socially influential companies that ever existed. Its products are in homes, businesses and entertainment venues. It constantly brings out new high-tech tools to the consumer electronics market, the most recent one being the Apple Watch. The creation of this company is more humble, and is the result of a conjuncture of various factors that have converged to create a unique environment. It all started with a group of amateur electronics enthusiasts. Smart individuals, an engineering-oriented social environment, business angels willing to invest in a new start-up company, and the developments in technology appearing at the right time and place have all contributed to this creation. It took engineering knowledge, visionary management and a business outlook to succeed. Individual entrepreneurs and developing countries carefully study the reasons behind the success and influence of Apple, so that they could recreate the conditions for imitating similar successes for themselves and their countries. Especially universities are encouraged to launch start-up companies and dive into the commercial world. Techno-parks are built to imitate the achievements of garage founded companies such as Apple. In this study, the perceived and deducted reasons for Apple’s success are examined using an opinion survey, and accounts of the founders are examined and conclusions are made based on this information. The results show that the perceived and true reasons for Apple’s success may be very different and that a legendary image of the company with an ardent fan base may obscure the true reasons behind its success.

gregory johnson

Scot King , Bruce Holman , Marilyn Gates

International Journal of Accounting and Financial Reporting Vol 4, No 2 (2014)

Zohaib Babar , Jawwad Jaskani , Tehreem Ilyas

Purpose: This case suggests the development of financial reporting of Apple Inc. in comparison with the industry over the period of 2004 to 2013. This study is helpful for different field of researchers e.g., management, technology, etc. Apple Inc. was found in 1976 by Steve Jobs. In 2007, Apple introduced smartphones and iOS and was the pioneer in this industry. But after the rising competition in this industry Androids snatched the market share from the Apple. Methodology: This study illustrates the reasons and the current performance of the company in the industry. The performance has been measured through actual financial data and through various financial techniques. Findings: This study has found that the company is losing share in the market because of the features in its products whereas the features offered by other competitors are relative consumer friendly and according to their demand. Suggestions: To retain the market share Apple should offer more products that are more affordable for the consumers. DOI: http://dx.doi.org/10.5296/ijafr.v4i2.6079

Samuel Roscoe

The Apple Computer Company is arguably one of the most innovative technology companies to emerge in the last three decades. Apple, Inc. is responsible for bringing to market such products as the Macintosh desktop and the portable computer, iPod and iTunes, and most recently, the iPhone. The success of the company can be traced to the ingenuity of their founder and CEO, Steven Jobs. His philosophy has always been to create products that consumers find easy to use and integrate innovative technology. Throughout Apple’s history it has accomplished these goals. However, with a growing line of products, a competitive market landscape, and an unpredictable technology life cycle curve, the company faces challenges as to the direction of its product lines. The case gives an overview of a tool that is used to analyze a company’s product line portfolio and applies it to Apple, Inc.’s array of products. Questions for discussion are provided to enable students to use critical thinking skills in applying the case material.

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David Bland on Testing Ideas & Assumptions (and How Leaders Can Help‪)‬ Agile Innovation Leaders

Bio   David is known for his ability to deliver inspiring and thought-provoking presentations that challenge audiences to think differently about innovation and product development. His keynotes and workshops are engaging and interactive, with a focus on real-world examples and case studies. David’s message is relevant for entrepreneurs, executives, and organizations of all sizes and industries, and he illustrates concepts live on stage to leave attendees with concrete tools and techniques they can use to drive innovation and growth in their own business.   Interview Highlights 02:00 Early Startups 02:45 Dealing with uncertainty 04:25 Testing Business Ideas 07:35 Shifting mindsets 11:00 Transformational leadership 13:00 Desirable, viable, feasible 14:50 Sustainability 17:00 AI 22:50 Jobs, pains and gains 26:30 Extracting your assumptions 27:30 Mapping and prioritisation 28:10 Running experiments   Social Media   LinkedIn:  David Bland on LinkedIn Website:  davidjbland.com Company Website: Precoil YouTube: David Bland on YouTube     Books & Resources   ·         Testing Business Ideas: A Field Guide for Rapid Experimentation (The Strategyzer Series): David J. Bland, Alex Osterwalder ·         Assumptions Mapping Fundamentals Course: https://precoil.teachable.com/p/assumptions-mapping-fundamentals/ ·         The Invincible Company: How to Constantly Reinvent Your Organization with Inspiration From the World's Best Business Models (The Strategyzer Series): Alexander Osterwalder, Yves Pigneur, Alan Smith, Frederic Etiemble ·         Value Proposition Design: How to Create Products and Services Customers Want (The Strategyzer Series): Alexander Osterwalder, Yves Pigneur, Gregory Bernarda, Alan Smith, Trish Papadakos ·         The Lean Startup: How Constant Innovation Creates Radically Successful Businesses: Eric Ries ·         Interviewing Users: How to Uncover Compelling Insights- 2nd Edition, Steve Portigal ·         The Mom Test: How to Talk to Customers & Learn If Your Business Is a Good Idea When Everyone Is Lying to You, Rob Fitzpatrick ·         Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers (The Strategyzer Series): Alexander Osterwalder, Yves Pigneur ·         The Four Steps to the Epiphany: Successful Strategies for Products that Win: Steve Blank   Episode Transcript Intro: Hello and welcome to the Agile Innovation Leaders podcast. I’m Ula Ojiaku. On this podcast I speak with world-class leaders and doers about themselves and a variety of topics spanning Agile, Lean Innovation, Business, Leadership and much more – with actionable takeaways for you the listener. Ula Ojiaku   Hello everyone. I'm really honoured and pleased to introduce David Bland as my guest for this episode. He is the best-selling author of the book, Testing Business Ideas, and he's also the Founder of Precoil, an organisation that's focused on helping companies to find product market fits using Lean Start-up, Design Thinking and Business Model Innovation. He's not a newcomer to the world of Agile as well. So, David, it's an honour to have you on the Agile Innovation Leaders Podcast. Thank you so much for making the time. David Bland   Yeah, thanks for inviting me on, I'm excited to be here. Ula Ojiaku   Right. So, where I usually start with all my guests, because personally, I am interested in the story behind the person - are there any happenings or experiences that have shaped you into who you are today? David Bland   Yeah, I think through childhood, dealing with a lot of uncertainty and then ended up going to school for design. I thought I was going to go a different career path and then at the last moment I was like, I want to really dig into design and I think people were sort of shocked by th

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Von der Automotive Branche bis zur Verteidigung, vom Außendienst bis zum Rettungsdienst: widerstandsfähige TOUGHBOOK Lösungen werden für den effizienten professionellen Einsatz entwickelt. Mit kundenspezifischer , bedarfsgerechter Erweiterungsmöglichkeiten und modularer Konstruktion bieten wir ausfallsichere Lösungen für jede Branche, jede Umgebung und jede Aufgabe.

TOUGHBOOK G2

Toughbook 40, toughbook 55, toughbook 33, pro services, produktion & fertigung, öffentliche sicherheit, verteidigung, häfen & intermodaler verkehr, technischer service & versorgung, gabelstapler, transport & logistik, lebenswichtige sekunden sparen mit toughbook g2.

Entdecken Sie die Funktionalitäten der MobiMed-Lösung von Ortivus mit dem TOUGHBOOK-Tablet, das für den robusten Einsatz konzipiert wurde. Diese Lösung zielt darauf ab, die Patientenversorgung durch die effektive Überwachung von Vitalparametern zu verbessern und so zu einer optimierten Gesundheitsversorgung beizutragen. Sehen Sie sich das Fallstudienvideo an, um mehr über die Fortschritte in der medizinischen Innovation zu erfahren.

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Nachhaltigkeit steht bei den meisten Unternehmen und Abteilungen ganz oben auf der Tagesordnung. Trotz des zunehmenden Bewusstseins für Nachhaltigkeitsfragen und des allgemeinen Wunsches, Computergeräte länger zu nutzen, sehen wir immer noch viele Unternehmen im vierjährigen Zyklus der technologischen Erneuerung stecken, wenn es um die mobilen Mitarbeiter geht.

TOUGHBOOK Blog

Bleiben Sie auf dem Laufenden mit marktführendem Fachwissen, Nachrichten und Einblicken, die Sie brauchen, um der Zeit voraus zu sein.

Why mobile device customers make the best (and toughest) critics

At Panasonic TOUGHBOOK we value our mobile device customers as tough critics who help us prioritize customer satisfaction over profits. Case studies on TOUGHBOOK users like ROSEN, Greater Manchester Fire & Rescue, and Axira demonstrate how customer feedback shapes our products to meet their specific needs.

Transports Metropolitans de Barcelona relies on Panasonic Connect technology

Our recent collaboration with Transports Metropolitans de Barcelona (TMB) has been under the spotlight for the implementation of advanced technology to improve traffic control on the city's bus lanes.

RE-THINKING AI AT PANASONIC’S TOUGHBOOK INNOVATION FORUM

How will artificial intelligence (AI) change the way we work, innovate, and create in the future? Our recent TOUGHBOOK Innovation Forum in Stockholm delved into the real-life applications of AI and how it’s being used to revolutionise workflows across industries.

TOUGHBOOK Innovation Forum ignites conversation on Mobility

Walk through the latest TOUGHBOOK Innovation Forum in the UK.

THE RISE OF EUROPEAN 5G PRIVATE NETWORKS IS AN OPPORTUNITY FOR BUSINESS

The telecommunications landscape in Europe is witnessing a transformative shift with the emergence of 5G private networks bringing new opportunities for mobile workforces.

Navigating Together Towards a Brighter Future: Our Commitment to Recognition2024

As businesses embark on a new financial year, now is a great time to reflect on the resilience and innovation that European organisations have shown over the past 12 months - in the face of unparalleled challenges - and to move forward with optimism.

Is your data safe? It can be stolen without you even noticing it!

We all know about hackers intercepting computers, phones and other smart devices through the Internet or apps. However, have you heard about a way to eavesdrop all your communications as well as your computer or printer without you knowing it and without leaving any trace on your device?

Die neuesten Branchen-Updates, Produktveröffentlichungen und TOUGHBOOK-Bulletins finden Sie in unserem News-Feed.

TOUGHBOOK G2 und 33: Jetzt noch robuster und vielseitiger

Mehr Rechenleistung mit Intel Alder Lake, mehr Sicherheit und erweiterte Modularität: Die kommenden Versionen des Panasonic TOUGHBOOK G2 und TOUGHBOOK 33 setzen einen neuen Standard für robuste Tablets.

How the Suez Canal Blockage in 2021 has revolutionized the navigation: Lessons Learned.

The blog delves into the aftermath of the disruptive event at the Suez Canal in 2021, shedding light on the increasing importance of advanced technology in the maritime industry for mitigating risks. It discusses the integration of rugged devices, like the Panasonic Toughbook, which are specifically designed to withstand the challenging maritime environment and facilitate precise navigation.

Panasonic auf der Intertraffic Amsterdam: TOUGHBOOK in Verkehrskontrolle und -management

Erleben Sie die vielfältigen Anwendungsszenarien der robusten und mobilen TOUGHBOOK Lösungen von Panasonic auf der Intertraffic Amsterdam vom 16. bis 19. April 2024.

Effizient und zuverlässig: Modern Device Management bei Kritischen Infrastrukturen (KRITIS)

Einsatzteams von KRITIS können Systemausfälle bei mobilen Arbeitsgeräten nur schlecht abfedern. Mit korrektem und umfassendem Gerätemanagement lässt sich hier gegensteuern. Modern Device Management (MDM) funktioniert automatisiert und kann Risiken kompensieren.

Business Views Wireless Connectivity As A Route To Productivity But Challenges Remain

European businesses expect to see an average 32% boost in productivity in the three years after implementation of the latest wireless technology.

Die neue Generation des vielseitigen TOUGHBOOK 55 für die wechselnden Anforderungen der modernen mobilen Arbeitswelt

Das TOUGHBOOK 55 mk3 hebt robustes mobiles Computing für jedes Anwendungsszenario auf ein neues Level: Deutlich verbesserte "Raptor Lake"-Rechenleistung, Modularität und Konnektivität.

Greater Manchester Fire & Rescue Service Selects Toughbook 33 Rugged Devices

Greater Manchester Fire and Rescue Service (GMFRS) has chosen 143 Panasonic TOUGHBOOK 33 rugged detachable devices for installation in its 93 vehicles

FALLSTUDIEN

Axira's resilient journey with panasonic toughbook: a testament to innovation and trust.

We're diving into a remarkable story that epitomizes resilience, innovation, and unwavering trust – the journey of Axira with our beloved TOUGHBOOK tablets. Buckle up because this one's a real game-changer!

Außendiensttechniker von Circet verlassen sich auf Panasonic TOUGHBOOK

Die Circet Gruppe ist der europäische Marktführer für Bau und Instandhaltung von Glasfasernetzen. Im Bereich Energie / intelligente Technologie etwa mit Ladestationen für Elektrofahrzeuge und digitalen Stromzählern in Büro- und Wohngebäuden. Als Teil der Circet Gruppe arbeitet auch Circet Benelux dabei mit allen wichtigen Akteuren auf dem Markt zusammen. Für seine Techniker im Außendienst setzt das Unternehmen in großem Umfang die robusten und vielseitigen Notebooks und Tablets von Panasonic TOUGHBOOK ein.

Panasonic TOUGHBOOK in service of G.D production and packaging plants

G.D, a prominent Italian-based supplier specializing in production and packaging machinery, opted to leverage Panasonic Mobile Solutions for facilitating mobile onboard interactions within its machinery.

Rosen erfasst & analysiert weltweit sensible Pipeline-Messdaten mit dem TOUGHBOOK 40

Zuverlässige Konnektivität und sichere Verarbeitung großer Datenmengen sind die Voraussetzung für die erfolgreichen weltweiten Inspektionen bei ROSEN. Das robuste TOUGHBOOK 40 arbeitet sehr zuverlässig und erfasst große Datenmengen dank schneller, kabelgebundener High-Speed Interfaces.

Digitalisation in Czech Ambulances

Toughbook in the service of a modern ambulance in Hradec Králové. The medical rescue service of the Hradec Králové Region uses the rugged Toughbook G2 tablet to save lives.

MobiMed at Gotland - saving vital seconds with TOUGHBOOK

Explore the functionalities of the MobiMed solution by Ortivus, featuring the TOUGHBOOK tablet, designed for robust use. This solution aims to enhance patient care by monitoring vital parameters effectively, contributing to streamlined healthcare. Watch the video to learn more about the advancements in medical innovation.

Greater Manchester chooses TOUGHBOOK 33 rugged devices for latest fire service MDT and demountable requirements.

Fire services across the UK are looking to equip their crews with the most effective and rugged mobile computing technology to become ever more effective and efficient. Greater Manchester Fire and Rescue Service chose TOUGHBOOK 33 devices for its Airwave Certified & ESN-ready Mobile Data Terminals and as demountable devices in the rear of its appliances.

On the road with Greenland's Survey: The conditions are so harsh that the gear has to be able to withstand pretty much everything

ASIAQ Greenland Survey performs many of the measurements behind the world’s climate surveys. But working in one of the harshest areas of the world is not for the faint-hearted.

Servicetechnik digital bei Kärcher - mit TOUGHBOOK zum exzellenten Kundendienst

Bei Kärcher dreht sich alles um wirkungsstarke Reinigungsmaschinen für alltägliche und außergewöhnliche Reinigungsprojekte - und als oberste Unternehmensmaxime um perfekten Kundenservice. Die Servicetechniker werden im mobilen Einsatz digital unterstützt - vom zuverlässigen, flexiblen TOUGHBOOK 33. Damit können sie sich um das Wesentliche kümmern: exzellenten Kundendienst.

Paramedics in Sweden make critical difference, using TOUGHBOOK

When every mission has the potential to mean life or death, you need tech that won’t let you down.

TOUGHBOOK A3 - Case Study - Makin

Machine control and Panasonic TOUGHBOOK are perfect partners on the construction site

Die papierlose Baustelle - weiter zur digitalen Bauabwicklung bei der KIBAG

KIBAG, ein Schweizer Tiefbauunternehmen, vollzieht mit dem digitalen Planstand den letzten Schritt zur papierlosen Baustelle. Alle Ausführenden können dort die vollständig digitalisierten Baupläne einsehen und direkt bearbeiten. Für die Arbeit auf dem Bauplatz steht dem Polier ein TOUGHBOOK G2 zur Verfügung, das die Ausführungszeiten verkürzt und Baufehler minimiert.

Katoen Natie FZ-M1 Case Study

Erfolg durch die Akzeptanz der Nutzer Katoen Natie ist ein Weltmarktführer im Bereich Logistikdienstleistungen. Das weltweit tätige Unternehmen umfasst 400 Betriebseinheiten mit 150 Terminals und Logistikplattformen. Es beschäftigt mehr als 10.000 Mitarbeiter.

Stadtwerke Bielefeld GmbH - Versorgung digitalisiert

Digitalisierte Prozesse bei Stadtwerke Bielefeld mit TOUGHBOOK Notebooks und TOUGHPAD Tablets Die Stadtwerke Bielefeld befinden sich im Wandel vom lokalen Energieversorger zum marktorientierten Dienstleister. Die neuen Aufgaben erfordern optimierte Prozesse, schnelle Reaktionen und bessere interne Abläufe. Im Rahmen des Einführungsprojekts MDE-Netze (MDE = mobile Datenerfassung) entschied sich das Unternehmen für robuste Notebooks von Panasonic, um Vorgänge zu digitalisieren und Daten mobil verfügbar zu machen.

Fibo Bau Case Study - Deutsch

Der Einsatz von digitalen Technologien sorgt in der Umsetzung von Bauprojekten für mehr Transparenz, qualitativ bessere Ausführungen und eine schnellere Umsetzung.

BLT Baselland Transport DE

Die BLT Baselland Transport AG (BLT) ist ein öffentliches Schweizer Transportunternehmen im regionalen Personennah-verkehr. Die BLT hat eine eigene Ticketverkaufslösung im Busbereich entwickelt und setzt dabei als Hardware Panasonic TOUGHBOOK ein.

Raben Case Study

Ein ununterbrochener Informationsfluss ist die Basis für einen reibungslosen Betrieb und optimalen Kundenservice in der Logistik. Um dies zu gewährleisten, nutzt die Raben Group die robusten, zuverlässigen Multifunktions-Handhelds TOUGHBOOK N1 für die präzise Erfassung und Bereitstellung umfangreicher Daten zum Lieferstatus - in Echtzeit.

Optimierte Lagerlogistik in der Getränkeindustrie

Traditionsbetrieb Otto Pachmayr mit neuem Warehouse-Management-System bereit für die Zukunft.

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What the success of Google Maps on iPhone tells us about Apple and monopolies -- and what the DOJ needs to understand about good products

T here are all manner of navigation apps for the iPhone. Apple Maps is the default choice, and is pretty extensive these days, but it's far from the only option. Just check the App Store. And in the battle to be top map app, Google Maps seems to have nabbed the chequered flag – even on iPhones.

According to this survey by MarketWatch, a whopping 70% of respondents flagged down Google Maps as their go-to navigation copilot. While Waze, Google's other prodigy in the mapping arena, snagged a commendable second place with 27%, Apple Maps trailed with 25%. It's somewhat unexpected that Google Maps is so popular, when Apple Maps comes enabled by default on the best iPhones – the most popular smartphones in the US.

This MarketWatch study wasn't just about counting hands, though; it was a deep dive into the habits of 1,000 US drivers. The study specifically focused on how these mapping applications were used to spot speed traps -- yep, traps on map apps. But it speaks to the popularity of Google's primary navigation app, especially over Apple's default option.

Could it be that good products are more popular?

Despite Apple Maps catching up to Google Maps' feature offerings recently, Google's map app has been a long-time favorite among iPhone owners. Historically, it's offered more features , an integrated experience, and better navigation overall. Plus, you can use it across all Apple devices, most notably CarPlay . In short, it's a good product. Arguably, it's a better product than Apple Maps.

So could it be that Google Maps is more popular because it's a better product? While you'd think that's a simple "yes", the DOJ might disagree with you.

The DOJ  filed a landmark lawsuit  against Apple last week, alleging the company has a smartphone monopoly. In the suit, the government claimed that one of the world's most successful and valuable companies has a stranglehold on phones, and stated bluntly that Apple uses it to extract more money from consumers. "Apple has gone from revolutionizing the smartphone market to stalling its advancement," said Deputy Attorney General Lisa Monaco. You can read the full lawsuit  here .

Google Maps is an interesting case study here, showing that a good product is usually the more popular option. Which is considered by users to be the case with iPhones, even if the tech-averse folks over at the DOJ might disagree.

If anything, this survey showing the popularity of Google Maps goes directly against the DOJ's lawsuit. The DOJ argues that Apple stifles competitors to make it harder for iPhone users to switch away. And I don't know about you, but the popularity of Google Maps on iPhones isn't particularly stifled. And Google is, I don't know, Apple's biggest competitor, perhaps. It's ironic, really.

More from iMore

• Maps App for iPhone and iPad: The ultimate guide
• Apple Maps transit directions: Which cities have them?
• How to share location and directions with Maps for iPhone and iPad

The state of AI in early 2024: Gen AI adoption spikes and starts to generate value

If 2023 was the year the world discovered generative AI (gen AI) , 2024 is the year organizations truly began using—and deriving business value from—this new technology. In the latest McKinsey Global Survey  on AI, 65 percent of respondents report that their organizations are regularly using gen AI, nearly double the percentage from our previous survey just ten months ago. Respondents’ expectations for gen AI’s impact remain as high as they were last year , with three-quarters predicting that gen AI will lead to significant or disruptive change in their industries in the years ahead.

About the authors

This article is a collaborative effort by Alex Singla , Alexander Sukharevsky , Lareina Yee , and Michael Chui , with Bryce Hall , representing views from QuantumBlack, AI by McKinsey, and McKinsey Digital.

Organizations are already seeing material benefits from gen AI use, reporting both cost decreases and revenue jumps in the business units deploying the technology. The survey also provides insights into the kinds of risks presented by gen AI—most notably, inaccuracy—as well as the emerging practices of top performers to mitigate those challenges and capture value.

AI adoption surges

Interest in generative AI has also brightened the spotlight on a broader set of AI capabilities. For the past six years, AI adoption by respondents’ organizations has hovered at about 50 percent. This year, the survey finds that adoption has jumped to 72 percent (Exhibit 1). And the interest is truly global in scope. Our 2023 survey found that AI adoption did not reach 66 percent in any region; however, this year more than two-thirds of respondents in nearly every region say their organizations are using AI. 1 Organizations based in Central and South America are the exception, with 58 percent of respondents working for organizations based in Central and South America reporting AI adoption. Looking by industry, the biggest increase in adoption can be found in professional services. 2 Includes respondents working for organizations focused on human resources, legal services, management consulting, market research, R&D, tax preparation, and training.

Also, responses suggest that companies are now using AI in more parts of the business. Half of respondents say their organizations have adopted AI in two or more business functions, up from less than a third of respondents in 2023 (Exhibit 2).

Gen AI adoption is most common in the functions where it can create the most value

Most respondents now report that their organizations—and they as individuals—are using gen AI. Sixty-five percent of respondents say their organizations are regularly using gen AI in at least one business function, up from one-third last year. The average organization using gen AI is doing so in two functions, most often in marketing and sales and in product and service development—two functions in which previous research  determined that gen AI adoption could generate the most value 3 “ The economic potential of generative AI: The next productivity frontier ,” McKinsey, June 14, 2023. —as well as in IT (Exhibit 3). The biggest increase from 2023 is found in marketing and sales, where reported adoption has more than doubled. Yet across functions, only two use cases, both within marketing and sales, are reported by 15 percent or more of respondents.

Gen AI also is weaving its way into respondents’ personal lives. Compared with 2023, respondents are much more likely to be using gen AI at work and even more likely to be using gen AI both at work and in their personal lives (Exhibit 4). The survey finds upticks in gen AI use across all regions, with the largest increases in Asia–Pacific and Greater China. Respondents at the highest seniority levels, meanwhile, show larger jumps in the use of gen Al tools for work and outside of work compared with their midlevel-management peers. Looking at specific industries, respondents working in energy and materials and in professional services report the largest increase in gen AI use.

Investments in gen AI and analytical AI are beginning to create value

The latest survey also shows how different industries are budgeting for gen AI. Responses suggest that, in many industries, organizations are about equally as likely to be investing more than 5 percent of their digital budgets in gen AI as they are in nongenerative, analytical-AI solutions (Exhibit 5). Yet in most industries, larger shares of respondents report that their organizations spend more than 20 percent on analytical AI than on gen AI. Looking ahead, most respondents—67 percent—expect their organizations to invest more in AI over the next three years.

Where are those investments paying off? For the first time, our latest survey explored the value created by gen AI use by business function. The function in which the largest share of respondents report seeing cost decreases is human resources. Respondents most commonly report meaningful revenue increases (of more than 5 percent) in supply chain and inventory management (Exhibit 6). For analytical AI, respondents most often report seeing cost benefits in service operations—in line with what we found last year —as well as meaningful revenue increases from AI use in marketing and sales.

Inaccuracy: The most recognized and experienced risk of gen AI use

As businesses begin to see the benefits of gen AI, they’re also recognizing the diverse risks associated with the technology. These can range from data management risks such as data privacy, bias, or intellectual property (IP) infringement to model management risks, which tend to focus on inaccurate output or lack of explainability. A third big risk category is security and incorrect use.

Respondents to the latest survey are more likely than they were last year to say their organizations consider inaccuracy and IP infringement to be relevant to their use of gen AI, and about half continue to view cybersecurity as a risk (Exhibit 7).

Conversely, respondents are less likely than they were last year to say their organizations consider workforce and labor displacement to be relevant risks and are not increasing efforts to mitigate them.

In fact, inaccuracy— which can affect use cases across the gen AI value chain , ranging from customer journeys and summarization to coding and creative content—is the only risk that respondents are significantly more likely than last year to say their organizations are actively working to mitigate.

Some organizations have already experienced negative consequences from the use of gen AI, with 44 percent of respondents saying their organizations have experienced at least one consequence (Exhibit 8). Respondents most often report inaccuracy as a risk that has affected their organizations, followed by cybersecurity and explainability.

Our previous research has found that there are several elements of governance that can help in scaling gen AI use responsibly, yet few respondents report having these risk-related practices in place. 4 “ Implementing generative AI with speed and safety ,” McKinsey Quarterly , March 13, 2024. For example, just 18 percent say their organizations have an enterprise-wide council or board with the authority to make decisions involving responsible AI governance, and only one-third say gen AI risk awareness and risk mitigation controls are required skill sets for technical talent.

Bringing gen AI capabilities to bear

The latest survey also sought to understand how, and how quickly, organizations are deploying these new gen AI tools. We have found three archetypes for implementing gen AI solutions : takers use off-the-shelf, publicly available solutions; shapers customize those tools with proprietary data and systems; and makers develop their own foundation models from scratch. 5 “ Technology’s generational moment with generative AI: A CIO and CTO guide ,” McKinsey, July 11, 2023. Across most industries, the survey results suggest that organizations are finding off-the-shelf offerings applicable to their business needs—though many are pursuing opportunities to customize models or even develop their own (Exhibit 9). About half of reported gen AI uses within respondents’ business functions are utilizing off-the-shelf, publicly available models or tools, with little or no customization. Respondents in energy and materials, technology, and media and telecommunications are more likely to report significant customization or tuning of publicly available models or developing their own proprietary models to address specific business needs.

Respondents most often report that their organizations required one to four months from the start of a project to put gen AI into production, though the time it takes varies by business function (Exhibit 10). It also depends upon the approach for acquiring those capabilities. Not surprisingly, reported uses of highly customized or proprietary models are 1.5 times more likely than off-the-shelf, publicly available models to take five months or more to implement.

Gen AI high performers are excelling despite facing challenges

Gen AI is a new technology, and organizations are still early in the journey of pursuing its opportunities and scaling it across functions. So it’s little surprise that only a small subset of respondents (46 out of 876) report that a meaningful share of their organizations’ EBIT can be attributed to their deployment of gen AI. Still, these gen AI leaders are worth examining closely. These, after all, are the early movers, who already attribute more than 10 percent of their organizations’ EBIT to their use of gen AI. Forty-two percent of these high performers say more than 20 percent of their EBIT is attributable to their use of nongenerative, analytical AI, and they span industries and regions—though most are at organizations with less than $1 billion in annual revenue. The AI-related practices at these organizations can offer guidance to those looking to create value from gen AI adoption at their own organizations.

To start, gen AI high performers are using gen AI in more business functions—an average of three functions, while others average two. They, like other organizations, are most likely to use gen AI in marketing and sales and product or service development, but they’re much more likely than others to use gen AI solutions in risk, legal, and compliance; in strategy and corporate finance; and in supply chain and inventory management. They’re more than three times as likely as others to be using gen AI in activities ranging from processing of accounting documents and risk assessment to R&D testing and pricing and promotions. While, overall, about half of reported gen AI applications within business functions are utilizing publicly available models or tools, gen AI high performers are less likely to use those off-the-shelf options than to either implement significantly customized versions of those tools or to develop their own proprietary foundation models.

What else are these high performers doing differently? For one thing, they are paying more attention to gen-AI-related risks. Perhaps because they are further along on their journeys, they are more likely than others to say their organizations have experienced every negative consequence from gen AI we asked about, from cybersecurity and personal privacy to explainability and IP infringement. Given that, they are more likely than others to report that their organizations consider those risks, as well as regulatory compliance, environmental impacts, and political stability, to be relevant to their gen AI use, and they say they take steps to mitigate more risks than others do.

Gen AI high performers are also much more likely to say their organizations follow a set of risk-related best practices (Exhibit 11). For example, they are nearly twice as likely as others to involve the legal function and embed risk reviews early on in the development of gen AI solutions—that is, to “ shift left .” They’re also much more likely than others to employ a wide range of other best practices, from strategy-related practices to those related to scaling.

In addition to experiencing the risks of gen AI adoption, high performers have encountered other challenges that can serve as warnings to others (Exhibit 12). Seventy percent say they have experienced difficulties with data, including defining processes for data governance, developing the ability to quickly integrate data into AI models, and an insufficient amount of training data, highlighting the essential role that data play in capturing value. High performers are also more likely than others to report experiencing challenges with their operating models, such as implementing agile ways of working and effective sprint performance management.

About the research

The online survey was in the field from February 22 to March 5, 2024, and garnered responses from 1,363 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. Of those respondents, 981 said their organizations had adopted AI in at least one business function, and 878 said their organizations were regularly using gen AI in at least one function. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP.

Alex Singla and Alexander Sukharevsky  are global coleaders of QuantumBlack, AI by McKinsey, and senior partners in McKinsey’s Chicago and London offices, respectively; Lareina Yee  is a senior partner in the Bay Area office, where Michael Chui , a McKinsey Global Institute partner, is a partner; and Bryce Hall  is an associate partner in the Washington, DC, office.

They wish to thank Kaitlin Noe, Larry Kanter, Mallika Jhamb, and Shinjini Srivastava for their contributions to this work.

This article was edited by Heather Hanselman, a senior editor in McKinsey’s Atlanta office.

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Moving beyond nuggets, burgers: How alt protein can capitalize on areas of whitespace innovation

04-Jun-2024 - Last updated on 04-Jun-2024 at 14:27 GMT

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“[The alternative-protein market] is a crowded, competitive market of which I would say both grocers and consumers are a little tired of what the offering looks like, and I think maybe a little disappointed broadly speaking with some of the offerings that [are] out there. I do not think there is a lack — and we have heard this from groceries as you talk to them directly — of interest from consumers. I think there is a lack of offerings meeting consumers’ needs. And so, in my mind, I think that is the gap that needs to be filled. And until then, I think you are going to see this dynamic of somewhat softness in the market because the current offerings do not meet that demand,” Rashid said.  

Editor’s note: Looking for more insight into the future of the alternative proteins market? Then, make sure to attend the Future Food-Tech Alternative Proteins summit in Chicago, June 17-18. On the first day, the "Future-Proofing the Alt Proteins Sector: What has Gone Wrong and What Lies Ahead?" will discuss overcoming market challenges to grow in the market. Visit the event website ​ here ​ ​  to learn more and ​ click here to register ​ ​ . ​

Alt-protein products ‘did not meet the whole needs of the consumer’

During its hype cycle in the early 2020s, alt-protein companies ended up creating a lot of similar products — including burgers, nuggets and grounds — that “were not particularly differentiated," Rashid explained.

She added, “The offerings... were very similar and did not have enough of a broadness for the utilization of how people think about the substitution of meat in their daily lives.”

Echoing the point, Jamie Valenti-Jordan, CEO of Catapult Commercialization Services, told FoodNaviagtor-USA that “one of the things that alt-protein in general suffers from is a lack of versatility” when it comes to the products and its uses.

The next generation of alt-products should "build more specific or maybe even more generalized versatile proteins" that do not require the same level of product formulation to release a finished product on the market, Valenti-Jordan explained.

“A lot of alt proteins still have to be dressed up from a flavor perspective or from a fat and mouth-coating perspective, and ... we are using a lot of starches and things like that. If we can build more robust protein systems that are able to work within that space — meaning able to hold the fat in place - ... then we should be able to see more versatile proteins as well as those applications [that] we cannot get today for a reasonable cost for things like cut-textured meat,” Valenti-Jordan said.

Are hybrid products part of the next wave of alt-protein innovation?

The alt-protein market can cater to more consumer needs by expanding its breakfast and deli-meat offerings and chef cuts and blocks in foodservice, Rashid explained.

This year, Israeli-based food tech company Yo Egg launched its plant-based sunny-side-up egg in the US. Additionally, seaweed-based bacon company Umaro ​ Foods will launch in a major retailer this year, supported by $3.8 million in recent financing.

Additionally, hybrid alt-protein- and animal-based products can provide an option for flexitarians who want to partake in the category but do not want to give up animal-based entirely, Rashid said. Food-tech company SCiFI Foods — which recently completed its first commercial-scale production run ​ — is creating a cell-cultivated beef to be used in a 90% animal-based and 10% alternative-protein-based burger.  

With these new products and more to come, the alternative protein industry is reshaping the contours of what is and is not in the industry, as the category moves beyond its initial vegetarian roots to embrace cell cultivation and other novel approaches to creating proteins, Rashid explained.

“I do not think it is so much who is in and who is out but more how do we redefine this category for what is a broad base of consumers who utilize and eat non-meat products in a different way today,” Rashid said.

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