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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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Apple Inc. in 2020

By: David B. Yoffie, Daniel Fisher

After a decade as CEO, Tim Cook is facing one of his biggest strategic transitions of his tenure. While Apple had performed spectacularly well under Cook, Apple's core business was maturing. Sales of…

• Length: 31 page(s)
• Publication Date: Apr 6, 2020
• Discipline: Strategy
• Product #: 720454-PDF-ENG

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After a decade as CEO, Tim Cook is facing one of his biggest strategic transitions of his tenure. While Apple had performed spectacularly well under Cook, Apple's core business was maturing. Sales of iPhones, iPads, and Macs were flat or down. However, Apple's new hardware-Apple Watch and Airpods-as well as services were growing rapidly. This case explores Apple's history and Cook's strategic options for driving new hardware and services into Apple's mainstream in the next decade.

Learning Objectives

This case can be used for several purposes, including industry analysis, introduction of complementary assets, sustaining competitive advantage and expanding corporate scope.

Apr 6, 2020

Discipline:

Harvard Business School

720454-PDF-ENG

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Apple Inc. in 2023

• Format: Print
• | Language: English
• | Pages: 26

About The Author

David B. Yoffie

Related work.

• January 2024
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• Apple Inc. in 2023  By: David B. Yoffie

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Apple Five Forces Analysis & Recommendations (Porter’s Model)

This Five Forces analysis gives insights into the external factors influencing Apple’s success. Michael E. Porter’s Five Forces analysis framework is a strategic management tool for evaluating the five forces affecting the business organization: customers, suppliers, substitutes, new entrants, and competitors. This Five Forces analysis of Apple Inc. sheds light on what the company does to ensure industry leadership. Despite the negative effects of external factors in the competitive landscape of the computer software and hardware, consumer electronics, and online services markets, Apple’s mission statement and vision statement are fulfilled through relevant business goals and strategies. Based on this Five Forces analysis, the company addresses competitive forces and external factors through effective leaders, such as Tim Cook. This Five Forces analysis indicates external factors that Apple’s strategic efforts must focus on to keep its leadership in the industry.

Based on the Five Forces analysis model, external factors in Apple’s industry environment point to competitive rivalry or intensity of competition, and the bargaining power of buyers or customers as the primary forces for consideration in the company’s strategic planning. Nonetheless, all five forces influence the company’s business situation, together with the effects of other external factors, such as the industry and market trends identified in the PESTLE/PESTEL analysis of Apple Inc .

Summary: Five Forces Analysis of Apple Inc.

Apple’s generic competitive strategy and intensive growth strategies are partly based on competitive forces in the external business environment. These forces limit or reduce the firm’s market share, revenues, profitability, and business development potential. This Five Forces analysis points to the following strengths or intensities of competitive forces in Apple’s industry environment:

• Competitive rivalry or competition: Strong force
• Bargaining power of buyers or customers: Strong force
• Bargaining power of suppliers: Weak force
• Threat of substitutes or substitution: Weak force
• Threat of new entrants or new entry: Moderate force

Recommendations. Considering the results of this Five Forces analysis, Apple must focus its attention on competitive rivalry and the bargaining power of buyers. This external analysis supports the company’s current position of continuous innovation. Innovation and the business competitive advantages shown in the SWOT analysis of Apple address the five forces in the external environment, although much of the company’s effort is for strengthening its position against competitors and for attracting customers to its products. An applicable course of action is to intensify research and development for innovation to develop novel products that complement iPhones, iPads, and other current products. Apple can also improve its support and resources for software or app developers, to strengthen the company’s ecosystem of hardware, software, and online services against the competitive challenges identified in this Five Forces analysis.

Competitive Rivalry or Competition with Apple (Strong Force)

Apple faces the strong force of competitive rivalry or competition. This component of Porter’s Five Forces analysis model determines the intensity of the influence that competitors have on each other. In Apple’s case, this influence is based on the following external factors:

• High aggressiveness of technology firms (strong force)
• Low differentiation of many products (strong force)
• Low switching cost (strong force)

Competitors’ aggressiveness in innovation and marketing imposes a strong force in the information technology industry environment. In the market for consumer electronics, software, and Internet services, Apple competes with Google (Alphabet) , Microsoft , Samsung, and Sony . In the video-streaming market, Netflix , Disney , Amazon , and Facebook (Meta) compete with Apple TV Plus. This Five Forces analysis also considers other technology firms, such as IBM and Intel , which influence Apple’s competitive environment. Moreover, in terms of product differentiation, products in the market are generally similar in fulfilling specific purposes. For example, many popular apps are available for Android and iOS devices, and cloud storage services from different companies are similar and available to users on different platforms. In this Five Forces analysis of Apple, such a condition creates a strong force by making it easy for customers to switch to other sellers or providers. On the other hand, the low switching cost means that it is easy for customers to switch from Apple to other brands, based on price, function, accessibility, network externalities, and related concerns. The combination of these external factors in this part of the Five Forces analysis leads to tough competitive rivalry that is among the most significant considerations in Apple’s strategic management.

Bargaining Power of Customers/Buyers (Strong Force)

The bargaining power of buyers is strong in affecting Apple’s business. This component of Porter’s Five Forces analysis model determines how buyers’ purchase decisions and related preferences and perceptions impact businesses. In Apple’s case, buyers’ strong power is based on the following external factors:

• Small size of individual buyers (weak force)
• High availability of information to buyers (strong force)

It is easy for customers to change brands, thereby making them powerful in compelling Apple to ensure customer satisfaction. On the other hand, each buyer’s purchase is small compared to the company’s total revenues. In this Five Forces analysis of Apple, such a condition makes customers weak at the individual level. However, the availability of detailed comparative information about competing products’ features empowers buyers to shift from one provider to another. This external factor enables buyers to exert a strong force in the industry, although promotional strategies and tactics in Apple’s marketing mix (4P) can communicate tailored information to persuade customers to buy the company’s products. Thus, this part of the Five Forces analysis shows that Apple must include the bargaining power of buyers or customers as one of the most significant strategic variables in the business.

Bargaining Power of Apple’s Suppliers (Weak Force)

Apple Inc. experiences the weak force or bargaining power of suppliers. This component of the Five Forces analysis model indicates the influence of suppliers in imposing their demands on the company and its competitors. In Apple’s case, suppliers have a weak bargaining power based on the following external factors:

• Moderate to high number of suppliers (weak force)
• Moderate to high overall supply (weak force)
• Large size of some equipment and component manufacturers (strong force)
• High ratio of firm concentration to supplier concentration (weak force)

The global size of its supply chain allows Apple Inc. to access many suppliers around the world. In Porter’s Five Forces analysis context, the resulting high number of suppliers is an external factor that presents only a weak to moderate force against the company. Also, the moderate to high overall supply of inputs, such as semiconductors, makes individual suppliers weak in imposing their demands on Apple. However, some large suppliers, such as OEMs and producers of chips, significantly influence the industry. Nonetheless, in this Five Forces analysis case, the high ratio of firm concentration to supplier concentration limits suppliers’ power and influence in the industry. This external factor reflects the presence of a small number of big companies, like Apple and Samsung, in contrast to a larger number of medium-sized and large suppliers. Thus, this part of the Five Forces analysis shows that the bargaining power of suppliers is a minor issue in developing Apple’s operations management strategies for supply chain management, value chain effectiveness, innovation, and industry leadership.

Threat of Substitutes or Substitution (Weak Force)

The competitive threat of substitution is weak in affecting Apple’s computing technology, consumer electronics, and online services business. This component of the Five Forces analysis framework determines the strength of substitute products in attracting customers. In Apple’s case, substitutes exert a weak force based on the following external factors:

• Moderate to high availability of substitutes (moderate force)
• Low performance of substitutes (weak force)
• Low buyer propensity to substitute (weak force)

Some substitutes for Apple products are readily available in the market. For example, instead of using iPhones, people can use digital cameras to take pictures, and landline telephones to make calls. In this Five Forces analysis of Apple, such an external factor exerts a moderate force in the industry environment. However, these substitutes have low performance because they have limited features. Many customers would rather use Apple products based on convenience and advanced functions. This condition weakens the force of substitution in impacting the company’s business in this Five Forces analysis context. Also, buyers have a low propensity to substitute. For instance, customers would rather use smartphones than go through the hassle of buying and maintaining a digital camera, an analog phone, and other devices. This part of the Five Forces analysis shows that Apple does not need to prioritize the threat of substitution in management decisions for business processes, like marketing, market positioning, and product design and development.

Threat of New Entrants or New Entry against Apple (Moderate Force)

Apple Inc. experiences the moderate force or threat of new entrants. This component of Porter’s Five Forces analysis model indicates the possibility and effect of new competitors entering the market. In Apple’s case, new entrants exert a moderate force based on the following external factors:

• High capital requirements (weak force)
• High cost of brand development (weak force)
• High capacity of some potential new entrants (strong force)

Establishing a business to compete with Apple Inc. requires high capitalization. Also, it is extremely costly to develop a strong brand to compete with large companies, like Apple. These external factors make new entrants weak in this Five Forces analysis case of the IT business. However, there are large firms with the financial capacity to enter the market. For example, Google has already done so through its consumer electronics. Samsung also used to be a new entrant. These examples show that there are large companies that have the potential to directly compete with Apple Inc. in multiple markets. Thus, the overall threat of new entry is moderate. This part of the Five Forces analysis shows that Apple must maintain its competitive advantages through innovation and marketing to remain strong against new entrants’ moderate competitive force.

• Apple empowers small businesses to grow and serve their customers .
• Apple Inc. – Form 10-K .
• Apple introduces global developer resource for labs, sessions, and workshops .
• Apple scores record 13 Academy Award nominations .
• Jahan, S. A., & Sazu, M. H. (2023). Role of IoTs and analytics in efficient sustainable manufacturing of consumer electronics. International Journal of Computing Sciences Research, 7 , 1337-1350.
• Sforcina, K. (2023). Digitalizing Sustainability: The Five Forces of Digital Transformation . Taylor & Francis.
• U.S. Department of Commerce – International Trade Administration – Software and Information Technology Industry .
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Table of Contents

Apple target audience , marketing strategy of apple, 5 key takeaways from apple marketing strategy, a case study on apple marketing strategy.

Breaking through with several inventions in the world of technology, Apple Inc. has been carving infinite milestones ever since its inception. Even though its innovations speak for themselves, this highly-valued giant corporation has invested heavily in its marketing team to soar high up as a tech maestro. Apple Inc. realized the role of brand marketing in the success of a venture from the start as a crucial way to connect with its target audience. This brand's marketing is so vigorously carried out and well-thought that it is often an inspiration and a place of research for marketing professionals. Here we bring you a well-curated case study on Apple's marketing strategy, the key takeaways to learn from this venture, and how to incorporate the same in your business and marketing strategies. 

Become a Certified Marketing Expert in 8 Months

To understand its key strategies for marketing Apple products, let's first understand what Apple's target audience is like. Apple's target audience consists of middle-class and upper-class users who can pay higher for products that provide them with an incredible user experience. This means that these users have a higher disposable income and are willing to pay more for as high-priced products as Apple's. 

Let's take a look at Apple's target audience with this comprehensive analysis sourced from Business Research Methodology's report on Apple Segmentation :

Besides this primary classification, Apple also explicitly targets professionals working in specialized software like music, video, photography and all kinds of design careers. These working professionals prefer Adobe’s Final Cut, Photoshop and related editing software which work well with Macbooks and IPads than other operating systems. 

Even better, business professionals prefer Apple products such as iPods and Macbooks for their day-to-day work. Products like iPads and Macbooks are lighter and portable, so they are often selected by students (upper-class), educational institutions and teaching. 

Now coming to the marketing strategy of Apple, it is a combination of well-designed products with the right user experience, promotional campaigns, distribution, and pricing. Let’s take a look at all these features of Apple marketing strategy in detail:

Focus on Finer User Experience

Apple’s branding strategy is based on its stylish, more straightforward and lush products that focus on providing a user interface that is very simple to use and learn. They are lighter, easy to carry as well as durable. This minimal look and user experience makes it a perfect sell to its target audience, which comes from the middle to upper class.

Suave Yet Simple Advertising

Storytelling is such an essential part of every Apple ad as well as a marketing campaign. Often these ads focus on minimal design as well as high-quality images. They are either blended with music or a simple story. Apple consciously ensures that its advertising and marketing don’t use too much jargon or filler language in its ads. Instead, it shines a light on the product to let it speak for itself without showing what the price is like or using complicated words for its features.

Targeting the Right Markets

Apple is excellent at tapping into its target audiences like a genuine tech witch who knows their aspirations, preferences and pain points! Its market research is always on-point and crystal clear in its products, curation, and features. 

Here are the major critical takeaways from Apple Marketing Strategy:

• Tapping into your target markets and audience is the key to curating and selling user experiences that value the preferences of its people. 
• With simplicity and finesse in design, the right products with minimal designs and features can create a perfect impact for your brand.
• Incorporating emotion in your advertising and marketing can also help you connect with your audience better. 
• Don’t exaggerate the copy and conceptualizing of your advertising and marketing campaigns and prefer the “less is more” approach. Create shorter yet emotional and empathetic ads to captivate your target audience.
• When you create an international brand value through quality and minimal, sophisticated design, you don’t need to compete in terms of price. Instead, your price will set you apart for your user experience and design features.

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Dr John Sullivan Talent Management Thought Leadership

Talent management lessons from apple: a case study of the world’s most valuable firm (part 1 of 4).

September 12, 2011

This past August Apple became the most valuable corporation in the world based on market capitalization, surpassing every firm in the technology industry and every other industry! As a consumer products company, its prolonged growth spurt is even more amazing because it has continued through economic times when consumers are reluctant to spend what little they have. Considering that Apple was near bankruptcy in 1997, its story is both extraordinary and noteworthy.

The extraordinary valuation is not a result of 30+ years of stellar performance. Apple has failed at many things. Its success isn’t the result of access to special equipment, manufacturing capability, or a great location, but rather superior leadership, access to great talent, and unusual talent management approaches.

Almost everyone in business is aware of Apple’s amazing product success and the extraordinary leadership of Steve Jobs. Some authors have described the firm’s approach to HR, but few have analyzed the firm close enough to identify  why the approaches work. Visits to the headquarters and interviews with HR leaders convinced me that there are lessons to be learned from this company. After two decades of researching and analyzing Apple’s approach to talent management, I have compiled a list of the key differentiators.

Apple Talent Management Approaches to Emulate

This three-part case study covers the many talent management factors that contributed to Apple’s extraordinary success in workforce productivity and innovation. It does not focus on the many important things that Steve Jobs did at Apple, because such things are not easily copied by others. It also focuses primarily on the approaches used within Apple’s corporate facilities versus those of Apple’s retail operations.

Agility Allows for Innovation into Completely New Areas

Many firms develop the capability to dominate their industry. Procter & Gamble, Intel, and Toyota are excellent examples. Apple is in a different league, however, because it has demonstrated the ability to shift into and dominate completely new industries every few years. For most of its history, Apple was a computer company (and its name used to be Apple Computer), but in the last decade Apple tackled the music industry with the iPod device and iTunes distribution channel. Next Apple conquered and dominated the smartphone industry with the iPhone and “App Store.” Most recently Apple challenged the PC as we know it and is in the process of disrupting the publishing industry. This ability to successfully shift from one industry to another in a few short years is known as agility. In my book, even wildly successful firms like Google, Facebook, Toyota, or Procter & Gamble can’t come close to matching Apple’s agility track record.

A great deal of Apple’s agility comes from the direction and vision of its senior leadership and its corporate culture, which reinforces the need to get ready for “the next big thing.” While Apple looks for agility in talent, the real key to Apple’s agility occurs post onboarding. At Apple, there is a cultural expectation that after succeeding in one task, you will immediately move on to something completely different. You know that you will have to retool and learn quickly. The expectation of radical change eliminates resistance and sends a message that employees can’t rest on their laurels. That means that they must mentally prepare for (and even look forward to) the next extraordinary challenge, even though you will get almost no “career path” help in determining which is the next best challenge for you. Apple employees work in numerous disconnected team silos, competing against one another with little or no foresight into the purpose or intended use date of their work.

The rapidly shifting work load means than an employee bored with their work won’t be for long because the work and the focus will change, a major attraction factor that brings in recruits desiring the challenge of radical change. Looking at the big picture, Apple’s ability to move into and dominate completely unrelated industries is only possible because of its extraordinary talent, the way that it manages it, and its approach to building an image that attracts the new skills needed to successfully move into completely new product areas.

A “Lean” Talent Management Approach Contributes to Extraordinary Productivity

Most firms strive to have a productive workforce. One of the best ways to measure workforce productivity is revenue per employee. Apple produces what can only be considered extraordinary revenue per employee; $2 million. A second measure of workforce productivity is profit per employee: nearly $478,000 for Apple (unbelievable considering it has a retail workforce).

If you are familiar with the concept of lean management, then you’ll understand the prime drivers for Apple’s extraordinary employee productivity. For years, the leadership of Apple has followed the philosophy that having less is more, meaning that by purposely understaffing and operating with reduced funding, you can make the team more productive and innovative.

Innovation at most firms is expensive because you must pay for a lot of trial and error. The lean approach, however, can improve innovation because with everything being tried, there simply isn’t enough time or money for major misses and re-do’s. “Unrealistic deadlines” at Apple mean that you have to get project problems solved early on, because there isn’t time to redo things over and over. Being lean forces the team to be more cohesive. Even providing a lean schedule forces everyone to be productive because they know there is no room for slippage. At Apple, the lean approach means that even with its huge cash resources, every employee must adopt the mentality of leanness. If you understand the lean concept and its advantages, you shouldn’t be surprised that numerous innovations have been developed in “garages,” the ultimate lean environment.

Build and Reinforce a Performance Culture

Any business analysis of Apple will reveal its laser focus on producing industry-leading results. While some feel the performance emphasis comes solely from Steve Jobs, the “performance culture” is continually reinforced by operational processes and practices. For example, having stock as a primary motivator forces employees to focus on the performance of the company and its stock. The rewards and recognition programs at Apple don’t include a component for effort or trying — only final results. Rather than celebrating numerous product milestones, only the final product unveiling is worthy of a major celebration.

A performance culture requires significant differentiation based on performance, and it’s clear that in this culture, the top performers and those who are working on mission-critical products are treated significantly differently. In fact, current and former employees frequently complained about the special treatment given to those designated as the “top 100 most important employees.”

Treating top performers differently may cause some employees to be disgruntled, but treating all employees exactly the same will frustrate your high-impact top performers and cause them to leave. Functions receive different funding also, based on their potential impact. Overhead functions that don’t directly produce product (i.e. HR) are often underfunded compared to product producing functions like engineering and product design.

Although there is certainly politics at Apple (where marketing seems to rule), having a degree from a prestigious school or past success on other products won’t get you far in the highly competitive culture at Apple. Jobs has no degree at all. The internal competition is fierce (even though they don’t know what other teams are doing) to develop or contribute to the most-talked about feature for the next WOW product.

Rather Than a Work/Life Balance, Emphasize the Work

Numerous HR functions proudly and prominently push work/life balance. Like them, Apple is proud of its long-established culture. You won’t find the term “balance” anywhere on the career site; instead, Apple makes it clear it is looking for extremely hard-working and committed individuals. On the website, for example, it proudly states: “ This isn’t your cushy corporate nine-to-fiver .” It reinforces the “hard work” message several times, including “ Making it all happen can be hard work. And you could probably find an easier job someplace else. But that’s not the point, is it ?

And: “ We also have a shared obsession with getting every last detail right. So leave your neckties, bring your ideas .”

If you don’t care about getting every precise detail perfect, great work, and a lot of it, Apple makes it crystal clear that this is not the place for you.

Next week: Part 2 — more talent management approaches to copy and learn from.

Talent Management Lessons From Apple … A Case Study of the World’s Most Valuable Firm (Part 2 of 4)

In Part 2 of this case study on Apple’s talent management practices, I look at its approach to innovation, compensation, and benefits, careerpathing, and online recruitment (its career site). Some approaches discussed are unique to sub-factions within Apple, as would be expected in any organization of significant size. It’s also quite rare for organizations that design, manufacture, and sell through direct retail to have consistent approaches across all units.

Talent Management Lessons To Learn and Copy (continued)

You should not be surprised to learn that the firm that made the term “think different” a brand uses talent management approaches that are well outside the norm. In addition to  the lessons presented in Part 1 , some approaches other firms can learn from Apple include:

Career paths reduce self-reliance and cross-pollination  — in most organizations, HR helps to speed up employee career progression. The underlying premise is that retention rates will increase if career progression is made easy. The Apple approach is quite different; it wants employees to take full responsibility for their career movement. The concept of having employees “own their career” began years ago when Kevin Sullivan was the VP of HR. Apple doesn’t fully support career path help because it doesn’t want its employees to develop a “sense of entitlement” and think that they have a right to continuous promotion.

Apple believes career paths weaken employee self-reliance and indirectly decrease cross-departmental collaboration and learning. Absent a career path, employees actively seek out information about jobs in other functions and business units. In a company where creativity and innovation are king, you don’t want anything reducing your employee’s curiosity and the cross-pollination between diverse functions and units. Automatically moving employees up to the next functional job may also severely narrow the range of internal movement within the organization, which could reduce the level of diverse thinking in some groups.

Create and manage a culture of innovation  — most firms have a culture with a singular focus on one attribute like performance, quality, customer service, or cost-containment. Apple is unique in that it has two dominant cultural attributes that exist side-by-side. The first (discussed in part one) is “performance,” with the second being “innovation”; the latter may actually be the strongest of the two. The dual emphasis works at Apple because the firm operates in the consumer technology field, where there is a universal expectation for “disruptive” performance.

Producing $2 million-plus in revenue per employee certainly establishes Apple as a performer, but it is its industry-dominating product innovation that differentiates it from competitors like HP, Sony, Microsoft, and IBM. Three factors drive the innovation attribute, including the expectation of continuous innovation, extreme secrecy within the product development process, and continuous brainstorming/challenge meetings (even at play just days before a product launch).

“I expect a pony”

Apple’s culture of innovation is unique because the goal is to produce a “pony, not a real horse but instead something so desirable that everyone wants it and considers it ‘gorgeous.’” Simple evolution doesn’t cut it — only extraordinary industry-leading innovation that results in WOW products does. To accomplish that, Apple doesn’t do what most consumers assume it does. Instead of developing completely new industry technologies, Apple takes existing technologies and then bundles numerous small developments on top to produce what appears to the public as giant step forward. It takes a powerful culture and group of managers to delay taking great work public faster, but Apple knows that numerous small releases don’t produce the same media and consumer buzz.

The expectation of innovation permeates the culture

The expectation of innovation is driven by Apple’s history of innovation, its leaders (who forbid the use of “that’s not possible”), and the peer pressure among employees to be among the contributors to the final product that the customer sees. In order to generate this expectation of innovation, it doesn’t rely on posters or motivational slogans (although they have those too …  around here, changing the world just comes with the job description ). Instead, every communication, process, product launch event, and even advertising slogans ( Think Different, Imagine the Possibilities, Here’s to the crazy ones. The misfits. The rebels. Etc. ) make it crystal-clear that innovation is at the heart of Apple’s success. Innovation has driven Apple’s past and current successes, and it will continue to drive future success. After walking in the door of the corporate offices in Cupertino, California, you can literally “feel” the expectation to innovate.

Secrecy drives internal competition

The second critical driver of innovation is the product development process. This innovation process is unique in that it doesn’t rely on a formal “ideation” type model; instead, it has been described as an “iteration” process energized by peer competition and Apple’s famous siloed/secret approach to teams. Apple does many things using small development teams, as many firms do, but doesn’t rely on a single team to design each product element. Multiple teams may be assigned to the same area (or they may accidentally wander into the same area). The approach has been called 10 to 3 to 1 because 10 teams may work on a product area independently. When work is ready for review a formal peer review, it will whittle 10 mockups to three and eventually down to one. It is an approach that is unique to Apple. Outsiders may consider it expensive and slow, but they can’t argue it isn’t effective.

Apple is well known for its obsession with secrecy in order to heighten the impact during a product release. Secrecy is also the most unique element in its innovation process. In order to maintain secrecy, development and design teams are intentionally siloed. As a result of these communication barriers, team leaders may not be initially aware of how many teams they’re competing against and what those other teams are working on. The level of open collaboration that you might find at other firms like Google is not possible under this process, but neither is early-stage groupthink. Once possible feature solutions move forward to peer review, the organization benefits from broader scope best-practice sharing and collaboration. While it may seem counterintuitive, Apple has turned “team silos” that would be a negative factor at most firms into a positive force.

Paired design meetings force free-thinking to continue until the end of the design

Another element of the design and innovation process is the holding of weekly “paired design meetings.” Every design team is expected to hold two meetings each week. The first is a traditional production meeting where small refinements are discussed and made. The second is a “go crazy” meeting, in which everyone brainstorms and uses free-thinking to scope out parameters. Most organizations stop these brainstorming meetings once the design parameters are clear, but Apple continues them long into the development cycle to guarantee that completely new ideas will constantly raise the innovation bar.

The talent management lessons to learn in the area of innovation include the concept that intense competition may produce innovation faster than any formal ideation process. In addition, peer vetting of ideas, delaying collaboration until toward the end of the development process, and requiring the continuous use of brainstorming processes may result in bolder innovations and higher levels of risk-taking.

Tying economic rewards to overall company success can reduce selfish behavior  – You won’t find anyone who will publicly argue that Apple pays well with regard to base compensation. Economic rewards at Apple are significant, but largely tied to the company’s valuation. The primary monetary motivator at Apple is “the opportunity for wealth creation” as a result of stock ownership. Most employees at Apple get periodic stock grants to reward their contribution. By putting the focus on the stock, they send every employee a clear message that individual accomplishments are important only if they directly contribute to the overall success of the company. This approach, coupled with the firm’s famous “product focus,” keeps everyone focused on product success rather than individual results and individual rewards. Individual rewards are provided based on performance and consist of stock grants and cash bonuses up to 30% of base salary. Apple’s retail employees also have stock opportunities. They are paid on an hourly basis and do not receive a sales commission.

Benefits and even pay play a secondary role in recruiting and retention — at Apple, the primary long-term attraction and retention factors are stock growth and exciting work. Because of the importance of these two factors, its message on benefits is clear. If you’re doing the best work of your life and having a major impact on the world, do you really need sushi in the cafeteria? (It has that also.) Although most talent competitors to Apple spend huge amounts of money on benefits, Apple’s offerings are spartan when compared to Google, Facebook, and Microsoft. While Apple’s health plan is well-funded, and it has good food and an on-campus gym, neither the food nor the gym is free. One perk that does excite potential applicants (especially in retail) is the employee discount on Apple products which is given to every employee. These discounts further support and reinforce Apple’s companywide emphasis on the product.

Your corporate jobs website should boldly inspire  — because the primary goal of most corporate career/jobs websites is simply to provide company and job information to potential candidates, most corporate job pages are chock-full full of information. Apple’s website is lean on information but strong on inspiration. As a result, after exploring the site, the potential applicant comes away inspired rather than with a pile of information about the company.

There are two categories of inspirational messages on the site, and each one is bold. The first group of corporate messages makes it clear that Apple is “anti-corporate.” In fact, the first bold headline you see is “ corporate jobs, without the corporate part .” They also highlight what they are proud  not  to have including  endless meetings, being bureaucratic, having executive perks and managers wearing suits . Instead they boldly tell you “ don’t expect business as usual .”

The second category of inspiration on the website concentrates on openness, innovation, and changing the world. Key phrases include “ open minds, collaboration, and of course innovation .” You will also find the phrase “ there’s plenty of open space — and open minds ” (obviously perfect sentence structure isn’t a high priority either). Finally, they promise to “ give you a license to change the world ” and “ be inspired .”

Its focus on inspiration is so strong that for a tech firm, there is a surprising  lack of technology-speak on the page . You will not find blogs, videos, or any mention of Apple’s availability on Twitter or Facebook easily. When it comes to mobile access, the site will render fine on the latest smartphones, but receives a 1.51/5.0 with regard to meeting mobile standards. If you visit the site, you might even find links that don’t work and features that load very slowly. What you will find is inspiration — loads of it.

I’ll leave you with this introductory statement from its career site:

“There’s the typical job. Punch in, push paper, punch out, repeat. Then there’s a career at Apple. Where you’re encouraged to defy routine. To explore the far reaches of the possible. To travel uncharted paths. And to be a part of something far bigger than yourself. Because around here, changing the world just comes with the job description.”

Next week,  Part 3:  Employer branding, recruiting, retention, and other talent management approaches to copy and learn from.

Talent Management Lessons From Apple… A Case Study of the World’s Most Valuable Firm (Part 3 of 4)

Want to impress your CEO? Few CEOs wouldn’t mind having the innovation track record of Apple, so there is probably no quicker way to become an “instant hero” then by learning how Apple’s talent management practices have contributed to its success and applying those practices relevant to your organization. In this installment of the case study, we’ll look at internal branding, employer branding, and recruiting.

Internal Brand Encourages Fighting the Status Quo

Steve Jobs and the management team at Apple have worked tirelessly to build a unique internal brand image at Apple that positions employees (at least mentally) as revolutionaries and rebels. Many years ago the organization influenced this internal brand by challenging employees to think how much more exciting it would be to be a pirate, rather than someone who followed the formal protocol of the regular Navy. It even flew a pirate flag over its corporate headquarters. The tradition of being revolutionaries is upheld even today with many supportive slogans including “Part career, part revolution.”

Apple is well known for using T-shirts, parties, and celebrations to build cohesion and to reinforce the internal brand as a ragtag group of revolutionaries. By getting employees to view their role as attacking the status quo, it helps to spur continuous and disruptive innovation. It has been successful in maintaining that internal brand image despite the fact that the top-down approach and intense secrecy run counter to its hatred of bureaucracy and all things “too corporate.” The external image further supports the internal brand.

You Can Have a Strong External Employer Brand Without an Employer Branding Program

Many among us dream of working at Apple, but unlike Google and Facebook, it’s pretty difficult to find out what it’s actually like to work there. A quick search on the Internet reveals that apart from a few alumni, most who have roamed the halls are pretty tight-lipped about their experience. While that silence is probably largely driven by Apple’s widespread use and vigilantly enforced non-disclosure agreements, even the corporation itself is relatively mum. You won’t find a great deal of employment advertising or find the Apple name on any one of a dozen or more best-company-to-work-for lists covering the technology sector, even though competitors like Google, Microsoft, and Intel are regularly listed.

Despite the silence, most would agree that Apple has a great “employer brand image”; Universum ranks Apple No. 10 among global engineering companies. The lesson to be learned is simple: use management practices that support your desired brand and elaborate brand management work will be unnecessary. Get your potential applicants to admire your firm for who and what the firm does by being the admirable firm.

Your Product Brand Should Serve Double-duty as Your Employer Brand

Instead of spending millions on building an employer brand, Apple lets its product brand do all the talking. Apple works hard on building and maintaining its product brand, which is ranked as  the #1 global brand  according to BrandZ ranking. Although product brand messages are intended primarily for customers, the messaging which emphasizes innovation and thinking differently also hasa major impact on potential applicants and employees. The logic is that if your organization lives up to its product promises, then it is natural to expect that the company’s jobs would also live up to the firm’s brand promise. In their minds, potential applicants make the connection between great products and a great place to work. In addition, because Apple’s products are talked about by everyone, there is a lot of brand association power lauded on those who work at Apple.

This public awareness and admiration can, coupled with a strong employee referral program, make generating a high volume of quality applicants easy. That same attention and curiosity will also enhance a firm’s retention rates because your employees will realize that the public sees them as collectively changing the world. Having employees believe that they are likely doing “the best work of their lives” is a powerful situation that most companies can’t easily mimic.

Being a Most-admired Firm May Be Enough

Apple does receive some notoriety in the press as the world’s  “most admired firm.”  In fact, Apple has been No. 1 for four years running on the list. That is an amazing feat. Apple dominates this list by being ranked first in eight out of the nine possible ranking factors. Those eight categories include factors that impress potential applicants, including people management, quality of management team, innovativeness, and social responsibility. The most admired list is based on the perceptions of business people and executives, something that Apple excels at managing. Having your firm admired garners enormous publicity in addition to increasing employee pride, engagement, and retention. The lesson to be learned by other firms is that if you don’t offer great benefits (which Apple doesn’t) you can get the same or even larger impact if you manage the perceptions of executives at other firms.

We want our people to be on the leading edge, so that everyone wants them… and then we must treat them right so they will stay, no matter what offers come along! – Apple Senior Manager

Aggressively Recruit the Best From Other Firms

The pirate-raiding mentality at Apple certainly carries over into recruiting. Apple has a long history of recruiting away top talent from other firms. In fact, the development of its iPod probably wouldn’t have occurred if it wasn’t for importing external talent from firms that didn’t appreciate the value of this new technology. Steve Jobs himself has been known to get directly involved in recruiting top talent. Apple has a top-grading type philosophy in that it targets top performers. Jay Elliot, its former VP of HR, cites one of Apple’s core principles as: ”Always… hire the best  ’A’ people. As soon as you hire a B, they start bringing in Bs and Cs.”

Apple’s recruiting approach is evolving because it has recently imported a team of recruiting leaders from Electronic Arts, but historically, despite the aggressive philosophy, its recruiting methods were pedestrian. It uses job boards and has an employee referral program that has paid up to $5,000, but its candidate experience is far from perfect. Glassdoor users rate Apple interviews 3.0/5.0 with regard to difficulty. Its college recruiting effort isn’t exceptional, with the exception of using recent college hires to help recruit the new crop. The key lesson for other firms to learn is that you can generate huge volumes of high-quality applicants if your firm is highly admired and if potential employees believe that they will be working on leading-edge products that everyone will be talking about.

In the retail group, there are two notable recruiting practices. The first has been the naming of the “ Genius Bar ,” where technical support is provided. Many applicants and employees in the retail area seem to be willing to put up with the relative drudgery of retail work simply for the opportunity to someday work their way up to becoming certified as a “genius.” The second is the use of employee referral cards that are well-designed and powerful. They reinforce the companywide focus that originated with Steve Jobs on recruiting the best from other firms. Recruiters and employees who witness great customer service at other retail and customer service outlets hand the card to those few individuals who provide impressive service. The front of the referral cards say “You’re amazing. We should talk.”

The back praises the individual and their work with a near perfect narrative … “ Your customer service just now was exceptional. I work for the Apple store and you’re exactly the kind of person we’d like to talk to. If you’re happy where you are, I’d never ask you to leave. But if you’re thinking about a change, give me a call. This could be the start of something great .”

Next week,  Part 4 : Apple’s approach to training and development, management, leadership, and other difficult-to-categorize talent management lessons to learn from.

Talent Management Lessons From Apple… A Case Study of the World’s Most Valuable Firm (Part 4 of 4)

The purpose of this case study was not to say that you should copy everything Apple does, but rather to point out that with relentless execution and focus on key factors even a firm near bankruptcy can fight its way back to the top. In 13 years Apple has transformed itself from an organization of the verge of collapse to the world’s most valuable firm, amassing a phenomenal innovation record in the process. While Apple’s approach wouldn’t work for every firm, there are lessons to be learned that can influence program design regardless of industry, firm size, or location.

In part 4 of this case study (here’s parts  1 ,  2 , and  3 ) on talent management lessons, the attention is on development practices, role of management, and inspirational leadership.

Make your employees “own” their learning, training and development  — because Apple frequently produces new products requiring expertise in completely different industries (i.e. computers, music devices, media sales, and telephony), its employee skill set requirements change faster than at almost any other tech firm. While there is plenty of training available, there is no formal attempt to give every employee a learning plan. Just as with career progression, employee training and learning are primarily “owned” by employees. The firm expects employees to be self-reliant. Its retail salesforce for example receives no training on how to sell, a practice that is certainly unconventional in the retail environment. The lesson is simple: providing target competencies and prescribing training can weaken employee self-reliance, an attribute problematic in a fast-changing environment. Employee ownership of development encourages employees to continuously learn in order to develop the skills that will be required for new opportunities.

Make managers undisputed kings  — Apple is not a democracy. Most direction and major decisions are made by senior management. “Twenty percent time” like that found at Google doesn’t exist. While in some organizations HR is powerful when it comes to people management issues, at Apple, Steve Jobs has a well-earned reputation for deemphasizing the power of HR. Although Apple was the first firm to develop an HR 411 line, I have concluded that most of the talent management innovations at Apple emanate from outside of the HR function. There is a concerted effort to avoid having decisions made by “committees.” Putting the above factors together, it is clear that at Apple, managers are the undisputed kings. The resulting decrease in overhead function interference, coupled with the increased authority and accountability, helps to attract and retain managers that prefer control. Unfortunately, concentrating the authority has resulted in having some managers being accused of micromanagement and abusing team members.

Having a product focus drives focus, cooperation, and integration  – Apple is notably famous in the business press for its “product-focused” approach (versus a functional or regional focus). Everything from strategy to budgets to organizational design and talent management functions are designed around “the product.” One of the primary goals of talent management is to ensure that the workforce is focused on the strategic elements that drive company success. That focus can be distracted with selfish or self-serving behavior that instead shifts the emphasis to the individual, a business function, a particular business unit or even a region. Although deciding to have a product focus is normally a business decision, it turns out that Apple’s strong product focus also has significant positive impacts on talent management.

This laser focus on producing a product makes it easy for everyone to prioritize and focus their efforts. A product focus is so powerful because it’s easy for employees to understand that final products can never be produced without everyone being on the same page. A product focus increases coordination, cooperation, and integration between the different functions and teams because everyone knows that you can’t produce a best-selling product without smooth handoffs and a lack of silos and roadblocks. With a singular focus on producing product, there is simply less confusion about what is important, what should be measured, what should be rewarded, and what precisely is defined as success. A product focus increases the feeling of “we’re all in this together” for a single clear purpose: the product.

Apple purposely offers only a relative handful of products, so employee focus isn’t dispersed among hundreds of products as it is at other firms. By releasing products only when it can have a major market impact, Apple essentially guarantees that every employee can brag that they contributed to an industry-dominating product that everyone is aware of. This focus on product helps to contribute to employees feeling that they are “changing the world.” This focus may also reduce the chance that employees will notice that the day-to-day work environment with its politics and the required secrecy may be less than perfect. And because Apple is no longer a small firm, with nearly 50,000 employees, a unifying and inspiring theme is required to maintain cohesion and a single sense of purpose.

Find a passionate and inspirational leader  — although Steve Jobs is no longer the CEO, no analysis of Apple would be complete without mentioning his importance in the firm’s success and the design of its talent management approach. He influenced nearly every aspect of the talent management approach. Not only is he one of the highest-rated CEOs by the public (he is  ranked  number three on the glassdoor.com list) but as a role model, he has had a huge impact on innovation, productivity, retention, and recruiting. His value is indisputable. The day after he resigned, Apple’s stock value fell by as much as $17.7 billion. It is too early to tell whether the new CEO, Tim Cook, who is markedly less inspirational, will be able to maintain the momentum that Jobs created. He has already shifted some executives and changed the company’s philanthropy approach by instituting a matching gift program for charitable donations.

Other miscellaneous talent management issues  — Apple executives are certainly in high demand at other firms that seek to be equally as innovative (for example, the head of the retail operation recently left to become CEO at JCPenney). Despite this demand, Apple certainly doesn’t have any significant turnover problems. You can, however, find  plenty  of negative comments about Apple on sites like glassdoor.com. Some describe Apple’s approach toward employees as a bit arrogant, and employees are certainly pushed to their limits. If you don’t “bleed six colors,” you simply won’t enjoy your experience at Apple for long. Although originally the firm emphasized employee recognition, it is not easy for those outside the firm to connect recent product successes to a single individual or team.

Apple is a team environment. Although many teams are forced to operate in isolation, that actually helps to build team cohesion. The competition between the different development teams is also intense, but that also helps to further strengthen cohesion. Like most engineering organizations, its decision-making model is certainly focused on data. Apple management likes to control all aspects of its products, but despite that, it is one of the best at using outsourcing to cover areas like manufacturing, which it has determined is not a core corporate competency.

Final Thoughts

Although Apple clearly produces extraordinary results, its approach to talent management is totally different than that of Google and Facebook, which also produce industry-dominating results. As Apple has grown larger, its rigor around sustainable innovation has grown as well, a feat that proves impossible for most organizations including the likes of HP, Microsoft, and Yahoo.

The three “big picture” learnings I hope you walk away from this case study with include:

• Focus on “the work” — it is management’s responsibilty to do whatever is necessary to keep work exciting and compelling.
• Strive for continuous innovation — Apple’s emphasis on being “different” is so strong that it can’t be overlooked by any employee or applicant. It delivers industry-dominating innovation levels because everyone is expected to.
• Deliver on your brand — Apple works hard to make sure that potential applicants, employees, and even competitors admire its products, the firm, and how it operates.

These three factors are not easy to copy, but they are certainly worth emulating. If you can bring them and the results that they produce to your firm, there is no doubt that you will be a hero.

Author’s Note : If this article stimulated your thinking and provided you with actionable tips, please take a minute to follow and/or connect with Dr. Sullivan on  LinkedIn .

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A Critical Analysis of Internal and External Environment: Case Study of Apple Inc.

Apple Inc. is a famous information technology firm in the global market. The organization has a wide range of products which consists of MacBook, iPhones, Apple TV, iPad and Apple watch. In this era of globalization with technologies, Apple’s users seek for unique performance products that are aesthetically pleasing as well as emphasize good product qualities. In 1976, Apple was established by Steve Jobs and his partners to develop modern technology products. In order to assess Apple’s strategic capabilities, Osterwalder’s Business Model Canvas is applied in this case study. There is several competitive analysis tools are written in this article including Internal Factor and External Factor Evaluation matrix, SWOT and SPACE Matrix, Boston Consulting Group (BCG) analysis as well as Internal-external (IE) analysis to evaluate Apple’s competitive intelligence. Throughout the report, every component in the evaluation model reflects the direction of how Apple overcomes the hurdles and how Apple could benefit by expanding their business in the international market. Lastly, Sun Zi’s Art of War is also being studied and included into business strategies of Apple. Keywords: Apple, Osterwalder, Factor Evaluation Matrix, SWOT, SPACE Matrix, Internal-external Analysis, Sun Zi’s Art of War

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Apple Case Study

Executive summary, introduction, measuring capability performance, options, recommendations and implementations, list of references.

Since Apple was established in mid 1970s, its popularity has become immense especially in computer technology industry. Its full potential was realised when it shifted its focus from marketing and promotion of computer products to development of innovative industrial design in modern electronics, unique hardwares, operation system and application softwares and services. It provides customers with new products and solutions that are easy to use and seamless integration.

The relevant competitive models chosen for this assessment includes the Michael Porte’s five forces such as entry of competition, threats to substitutes, bargaining power, power of suppliers and rivalry, SWOT and Industrial analysis as well as micro analysis in order to assess Apple Inc. strategic capabilities and suggest future directions for the business. Apple assessment also analyses the results of a study presented to examine how it utilises customer satisfaction data obtained from formal feedback mechanism.

Company background

Apple was founded in 1970s by Steven Jobs who then became the company CEO. Apple first started as a computer company in 1976 and was fast recognised for its intuitive adaptation approach of graphical user interface that saw the adoption of the first mouse and first onscreen windows.

Steven Job innovative approach focused more on specialised products and by 2001, its full inventions came into play with the introduction of iPod, a product that ranked top in the market leader in music players. Eventually, iPhone came into play in 2008, followed by iMac, iPad and iTunes which have also been widely successful. This meant that electronic products combined with eminent good customer support throughout its product base were slowly becoming the company’s primary objectives.

Summary of Macro Analysis

Macro analysis also known as PESTLE is an analysis of the external macro environment in which a business operates. PESTEL analysis includes factors such as political, economic, social, technological, legal and environmental issues. For a detailed analysis, the following table illustrates the macro environment of Apple Inc:

Apple Case Analysis

Apple ranged top in customer satisfaction with phone-based technical support, feedback, face-to-face communication, email communication, and information exchange in the American Consumer Satisfaction index (ASCI) in the second quarter of 2009. These companies were credited for offering the best technical customer satisfaction service within the Personal Computers category with a base score of 77 on a 100 point scale and earned 83 points in the second quarter of 2006.

Business analysts have argued that the companies’ ability to focus on product innovation and customer satisfaction has won the company loyal customers compared to other PC vendors. Quality of customer service is always the determining factor for success of any company and not its products, and the three companies for this case have gained tremendously from such strategy.

Van Amburg, the managing director of the American Customer Satisfaction Index (ACSI) argues that customers from other service providers were very frustrated with company’s customer service despite the quality of its PC hence loss of loyal customers and the services continued to deteriorate as years went by (Moore & Knight 2010; Keizer 2009).

In ensuring quality satisfaction in information collection, Apple launched Consumer Privacy Policy that ensured the collection, use and disclosure of personal information regarding customer issues are kept at optimum security. The company pledges to safeguard personal information collected when visiting the company’s website, purchase of products and services and when a customer calls the sales team or support associates.

Personal information collected here is aimed at helping the company deliver higher customer service and provide convenient access to company’s products and services. Information collected from customer’s reviews also helps the company implement and post the latest product announcement on special offers, software and events (Apple 2010; Levitan 2004; Prasaad 2009).

Summary of Industry Analysis

Porter’s analysis focuses on the threat of new entrants, bargaining power of suppliers and buyers, power of substitutes and rivals on profitability in an industry.

The following table presents Porter’s five forces analysis of the micro environment of Apple Inc.

The industry analysis of our company in the market displays strong competition in the computer technologies and electronics. Apple maintained its competitive edge by progressively innovating product designs and operational execution.

Its product lines were also diversified and supplied its products to retail stores and eliminated third-party retailers. The company also opened up to 247 stores including 19 internal locations averaging to $29.9 million in sales revenues. The company has numbers of loyal, & the customer base reports the permanent growth (Keizer 2009).

Suppliers have helped Apple diversify their products. Apple entered into a multi year agreement requiring its major key components that included dynamic random access memory DRAM, LCD displays, NAND flash memory and microprocessors that included partners such as Hynix Semi-conductor, Intel Corporation, Samsung, Micron Technology and Toshiba Corporation. It also partnered with other corporations internationally to ensure final assembly of its products are concentrated on quality issues (Keizer 2009).

On market research aspect, Apple was reported to collect personal information on various occasions for market research purposes. This information is aimed at gaining better understanding of customers needs, improve products and determine how best to provide useful information (Apple 2010; Hewlett-Packard Development Company 2010).

Apple partnered with other service vendors such as MobileMe and iTunes stores to help in collection of information by requiring customers to customer’s to create an “phone company ID” before purchase of products.

The ID is strategy is designed to help customers have easier access to web services and saves them time since they don’t have to give their personal information when requesting for services. The procedure requires creation of personal profiles by adding the name, phone number, email address or credit card number together with a suitable password that will be used to access the profile.

Once the signing up procedure is completed, the customer is allocated personal ID and a password that the system generates automatically. Therefore next time the customer enters the website to re-purchases products is welcomed by personal greetings by mentioning his name and is able to access up to date information regarding the product purchased which can be used wherever the client goes (Apple 2010).

In order to survive in the competitive environment, company’s have to device a number strategies to beat their competitors like changing the price of the product-which is in fact a temporary solution, improving product features- key to success, creatively using channels of distribution and exploiting relationship with suppliers. When we look at these examples, brand recognition seemed to cut down costs of advertisements.

On this perspective, Apple diversified to digital consumer electronics such as iPod, iPhone, iMac among others widened its product markets. Apple dominated computer markets introducing itself a premier provider of technology solutions for educators, web designers and graphic artists, to digital entrainment company. The software iPod was later integrated into windows version of iTunes making it easier for everyone one to purchase and use (Keizer 2009).

Apple introduction of feedback system and outreach programs enabled customers to report on defective machines and the company to attend to problems before they occur. For example, one of the Company’s products “iMac” was widely reported for to be giving clients problems and the company responded by giving 15% refund bonuses to all faulty 27 inch iMac in the UK and was also reported to extend $300 apologies to all its aggrieved customers in the US.

In resolving the issue, the company responded quickly by offering free repairs to all the affected machines and launched a support page where it described how minor problems could be resolved and the resulting warranty extension for each affected machine. The company also reimbursed customers who used their own money to repair the faulty machines and advised them take their drives to official Apple repair channels (Moore & Knight 2010; O’Reilly & Anderson 1980).

On bargaining power of suppliers’ aspect, Apple’s primary segments included America, Europe, Africa, Japan and Middle East and other retail divisions Italy, Canada and the United Kingdom. It offered its customers wide range of products and invested heavily on R&D year after year. Apple’s products were distributed all over US retail stores where customers could easily access and report of defective devices (Mank & Nystrom 2000, p.504).

Summary of Internal Analysis

Internal Analysis also known as SWOT analysis determines company’s competitors and develops sales & marketing strategies for the company that allow it to achieve its marketing & strategic objectives.

The SWOT Analysis of the Apple Inc. position in the market is necessary for the development of the marketing plan.

Resources Analysis

Amidst the financial crisis, Apple continued to introduce strongest products lines, with most talented employees and best customers with sales revenue totalling to $10 billion in quarterly revenue of 2009 and $25 billion in cash safety bank with zero debt. Demographic & socio-economical factors like population distribution changes & increase/decrease in income levels of social group also affected the company to a considerable extent (Apple reports 2008; Hesseldahl 2009).

Dynamic Capability Analysis

Dynamic analysis refers to the innovative strategies a firm employs to gain competitive advantage over its competitors. In other words, what Apple is doing different that sets it apart from other companies. For instance, the company has progressively applied technological advancement and business diversification over the years.

Apple continues to diversify its product line from PCs inventions, to iPods, iPhones, iTunes and other peripherals. Also, the 2007 smart phone technology that saw the integration of wireless phone, music player, video player as well as internet browsing demonstrated how the company continues to diversify in our markets (Apple reports 2008).

Strategic Capability Analysis

Apple’s strategy to integrate Intel-based iMac desktop and the MacBook Pro portable softwares increased its company’s market share. Also, the introduction of feedback system and outreach programs that enabled customers to report on defective machines seemed to have gained the company a competitive edge over its competitors. The company also introduced support centre strategically designed to attend to software problems before they occur (Apple reports 2008).

Apple’s recent merger with software developers and leading voice-entry technology providers demonstrated its strong command and reputation in information technology. However, Apple should take adequate time in testing its products before rushing to introduce them to the markets like case for MacBook Air that left many customers disappointed (Apple reports 2008).

Gap analysis and assessment of current strategy

Gap analysis is a methodology that helps a company identify gaps and decide upon marketing strategies and tactics. The company has moved beyond personal computer industry to music, videos, movies, and television. Diversification is in it itself a good marketing strategy, but the company should concentrate on development of quality products to cut down on increased numbers of defective products and recalls.

Apples hiring John Sculley from PepsiCo spearheaded marketing and operations of the company while Steven Job focused on technology that lead to the introduction of more creative products like Macintosh in 1984. The new CEO enabled breakthrough in electronic products in terms of elegant design and easy use. The company should employ the same strategy in future to in employing competent workforce that will turn boost company sales revenues.

How does strategy match the macro environment?

For Apple, there is a large gap between product strategy and socio-economic and demographic changes. Keeping in pace with technology helped the company gain competitive advantage over its competitors and the uniqueness of goods and services offered facilitated the further strengthening of market position. However, its inability to adjust to socio-economic and demographic changes might undermine its market position in future.

How does strategy match the industry environment?

Apple engaged in a head to head competition with Dell in the computer markets with company CEO Steve Jobs claiming that market shares weren’t everything. This statement is in itself contradictory since company’s engage in business activities for profits. Dell was able to dominate the markets due to its efficient supply chain management although Apple outperformed it in inventions and other metrics. Apple should look into fixing sufficient price flexibility and adjustment to socio-economic changes.

Since compatible software were introduced in the markets, IBM prices dropped and Apples costs for R&D were higher industry costs since the company spend a considerable amount of its sales revenue on R&D. Scully innovative efforts were not enough to sustain the company’s poor performance. Apple could have taken time to study its markets demands before heavily investing in unprofitable deals. Since Michael Spindler came into play in 1993 introducing PowerMac, Apple moved to price-performance edge.

The new CEO’s strategy was to let other companies manufacture Mac clones, a strategy that saw many clones stealing 20% of the Macintosh unit sales. For this case, Apple should be seeking a CEO that upholds their key capabilities and strengths, whilst being able to improve in other areas that are deficient (Mank & Nystrom 2000, p.501).

Apple’s current strategy of launching more new products to expand the markets should be sustained. However, the company should also try to promote its products through media advertising and offering products at discounted price to increase the satisfaction level of the customers. Apple never seemed to experience intense competition since it had strong market power and had the ability to introduce new products.

Its strategies to beat the markets severely stretched its budgets that amounted to further losses. For example, when Macintosh was first introduced in the markets quickly became people’s favourite with large graphics but had slow performance and could not be integrated with many softwares in the markets. NeXT Computer introduced after Macintosh proved costly and did not yield the company any profits. For this case, Apple should incorporate through market analysis to avoid sipping in market shares.

Apple., 2010, ‘ Apple Customer Privacy Policy ’. Web.

Apple reports fourth quarter results, 2008. Quarterly results. Web.

Hesseldahl, A., 2009. Apple’s impressive quarterly numbers . BusinessWeek. Web.

Hewlett-Packard Development Company, 2010. Overcoming the no. 1 challenge in data center transformation . Web.

Keizer, G., 2009. Apple still can strive, sans Job. Computer World, 56 (2), pp.1-4.

Levitan, B., 2004. Improving customer loyalty through proactive communication. Consumer Interaction Solution . Web.

Mank, D. & Nystrom, H., 2000. The relationship between R&D spending and shareholder returns in the computer industry. Management of Society Proceeding , 20, pp.501-504.

Moore, C. & Knight, D., 2010. Apple Retains Lead in Customer Satisfaction, iMac Screen Problem Resolved, 64 GB for Mac Pro and More . Web.

O’Reilly, C. & Anderson, J., 1980. Trust and the Communication of Performance Appraisal Information: The Effect of Feedback on Performance and Satisfaction. Human Communication Research , 6, pp.290-298.

Prasaad, S., 2009. Establishing successful customer relationships through effective communication: An Indian perspective. Marketing and Management Communication , 64, pp.1-71.

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Money blog: 600 new skyscrapers 'on way' for London, report finds

A reader seeks help as her employer of 24 years is bringing in a new clock-in system to pay her by the minute. Read this and all the latest personal finance and consumer news in the Money blog - and share your own problem or dispute below.

Monday 13 May 2024 16:15, UK

• Gen Z would rather deliver parcels than work in restaurants, Michel Roux Jr claims
• 600 new skyscrapers on way for London, report finds
• Money Problem: My workplace is bringing in new clock-in system to pay us by the minute - is this allowed?
• Free childcare applications open for new age band

Essential reads

• How to make sure your car passes its MOT
• 'Loud budgeting': The money-saving trend that has nothing to do with giving up your daily coffee
• How to avoid a holiday data roaming charge (while still using the internet)
• Best of the Money blog - an archive

Ask a question or make a comment

Gordon Ramsay's restaurants tripled losses to £3.4m last year, as the chef warned businesses in the industry were facing a "challenging" climate. 

The chef's group spent millions opening five new restaurants in 2023, including a Lucky Cat in Manchester, a Bread Street Kitchen in Battersea Power Station and a Street Pizza in Edinburgh. 

Sales at his wide-ranging establishments rose, however, by 21% to £95.6m in the year to August, according to The Telegraph. 

"It's been a really hard-fought year, but at the same time an exciting year, and in tough times it amazes me how strong and vibrant our industry is," Ramsay told the news outlet. 

"It's challenging out there and businesses are battling to stay afloat, rising costs, rent and food costs, multiple strikes. It's a battle" 

He was optimistic, however, saying there hasn't been "so much passion and vibrancy" in the industry since he opened his first restaurant in 1998.

"We've still got something wonderful to celebrate, and I truly believe the industry has never been so exciting."

Once the UK's favourite alcoholic beverage, beer's popularity seems to be fading among the younger drinking generation... 

In fact, only 30% of people aged 18 to 24 ever drink it, according to a study commissioned by the Society of Independent Brewers. 

Instead, younger drinkers say they prefer drinking spirits, wine and cider. 

Pub visits appear to be suffering as well, with almost a quarter of the 2,000 people surveyed saying they have never visited their local. 

SIBA's 2024 Craft Beer Report paints a more positive picture for small and independent brewers, however, with more than 55% of beer consumers saying they now drink "local craft beer". 

It also found average beer production volumes among independent breweries has risen by 14% since last year - a return to pre-pandemic levels for the first time in 4 years. 

"Demand for local, independently brewed beer in the UK is strong, with independent brewers reporting production volumes up by 14%, meaning they have returned to 2019 volumes again," Andy Slee, SIBA's chief executive, said. 

But, he said, it's time for "cautious optimism" only, with the industry still plagued with a number of issues. 

"The short-term issue for small independent breweries isn't demand; it's profitability, rising costs and financial pressures such as lingering COVID debt," he said. 

"Far too many breweries are simply trying to survive rather than thrive, so while there are many positives signs highlighted in the report, for now it's cautious optimism."

Earlier this year, our Money reporter Emily Mee explored whether the UK's big night out culture was dying out. 

Nightlife experts warned we're losing one club every two days at the moment - and if we stay on this trajectory, we will have none left by 2030.

You can read more about her findings here...

A total of 583 skyscrapers are "queuing up in the pipeline" to be built across central London, a development thinktank has said. 

That is more than double the 270 built in the past decade. 

In the eastern borough of Tower Hamlets alone, 71 tall buildings were completed in that time that time, the report by New London Architecture found. 

A further 24 were in the City of London and 27 in Canary Wharf and Isle of Dogs. 

The report said the rapid change has been fuelled by a "burgeoning demand" for office and residential space, overseas investment and a supporting planning environment. 

"Tall buildings have changed the face of London substantially over the last 20 years and will continue to do so - the pipeline that NLA has tracked means there is at least 10 years' supply that has already been defined," Peter Murray, the organisation's co-founder, said. 

"London's population continues to grow, passing the 10 million mark at the end of this decade.

"We'll still need tall buildings; and NLA will continue to keep a close watch on what's going on." 

Restaurants might only be able to open three or four days a week due to staffing problems, Michel Roux Jr has warned. 

Speaking to The Telegraph as he gears up to open his new restaurant Chez Rouz, the Michelin starred chef admitted the industry needs to change to accommodate flexible working hours. 

"Just because I worked 80 hours a week or more doesn't mean the next generation should," he said. 

"Quite the contrary. That is something that we have to address in our industry."

But, he warned that the move will come at a cost... 

"It will mean ultimately that going out is going to be more expensive, and that maybe your favourite restaurant is no longer open seven days a week - it's only open three or four days a week," he said. 

The industry is known for its long, unsociable working hours, and Roux Jr explained that the real issue hit after the pandemic, with people no longer wanting to work weekends. 

"People don't want to work unsociable hours and would rather work delivering parcels as and when they want to. It's as simple as that," he added. 

Earlier this year, Roux Jr said goodbye to his famous restaurant Le Gavroche in London. 

It had been opened by his father Albert Roux and uncle Michel Roux in 1967. 

Now, he said it's "brave" to open a new restaurant, with the market "very, very tough". 

"I really feel for anyone that is brave enough to open up a restaurant now. It's incredibly difficult," he added. 

Chez Rouz at The Langham in Marylebone, central London, is due to open on 22 May. 

By James Sillars , business news reporter

A pause for breath on the FTSE 100 after a 3% gain over the course of past week that took the index to a fresh record closing high.

The rally of recent weeks - significant for London's standing and pension pots alike - has been broad based and reflects several factors.

A major driver has been sterling's weakness versus the US dollar.

The US currency has been strong as the Federal Reserve, its central bank, has hinted it will be some time yet before it begins to cut interest rates.

Language out of the Bank of England last week sparked a flurry of bets that UK rates could be cut as early as next month.

A weaker pound boosts dollar-earning constituents on the FTSE 100 because they get more for their money when dollars are converted to pounds.

Also at play is the view that UK stocks represent good value, as they are cheaper compared to many of their international peers.

A few moments ago, the FTSE 100 was trading 6 points lower at 8,423.

A major talking point is the possibility of the Chinese fast fashion firm Shein listing in London.

According to Reuters, the company has shifted its focus to the UK after receiving a lukewarm reception in the United States.

The news agency, citing two sources, reported that Shein was stepping up its preparations for an initial public offering in London that would be expected to be one of the biggest carried out globally this year.

By Emily Mee , Money team

No one likes the date in their calendar when their MOT rolls around. 

But to make things a little less stressful, consumer expert Scott Dixon - known as The Complaints Resolver - has given us some tips on what to look out for to help your vehicle pass with flying colours. 

Some of the most common failures are faulty steering, brakes, suspension, worn or damaged tyres, cracked windscreens and faulty lights. 

Mr Dixon recommends you get your car serviced a couple of weeks before your MOT, in case there are any complex or costly issues. 

This will give you time to get them fixed and get your car through first time without any advisories. 

Aside from taking your car for a service, there are also some easy checks you can run yourself... 

Listen for unusual clunks while you're driving - this could be a sign of a damaged suspension. 

You could also check by pushing the car down on each corner. It should return to normal without bouncing a few times. 

Another option is to look with a torch under the wheel arch, as this should reveal any obvious defects. 

Blown bulbs are a common MOT failure, but they're cheap to fix. 

Walk around your car and check all the bulbs are working - this includes the headlights, sidelights, brake lights, indicators and the number plate bulb.

Mr Dixon says it's "not an easy job" to change the lightbulbs yourself on most modern cars, as the MOT will also check the positioning of the light. Therefore he recommends getting this done professionally. 

Squealing or grinding noises may be a sign your brake pads need replacing. 

You should also check whether your car stops in a straight line, or whether it pulls in different directions. 

Don't forget about the handbrake, too. Test it out on a slope and see if it securely holds the car. If it doesn't, you should get it adjusted. 

It's easy to check if your wipers work okay, but you should also make sure to inspect the blades for tears and rips. 

They should be able to clean the windows with no smears. 

Mr Dixon says you don't need to pay Halfords to change your wiper blade as you can "do it yourself in seconds". All you need to do is look for a YouTube tutorial. 

He also recommends buying the Bosch wiper blades, as he says these are good quality and will also be a sign you've looked after your car well when you come to sell it. 

One thing to look out for is tread depth. You can do this by looking for the "wear bar" that sits between the tread. 

If it's close to 1.6mm and is low, you should get the tyre replaced so it's not flagged as an advisory. 

Also check for perished tyre walls, which can happen when a vehicle is standing for any length of time. 

Uneven tyre wear is another potential issue, and if there are signs of this you should get the tyre replaced and tracking and suspension checked. 

These must be in good condition and working order, with no tears or knots. 

Registration plates

Your number plates should be clean and visible with a working light bulb at the rear. You may need to give them a wipe and replace the bulb if necessary. 

This should be in good condition, without damage such as loose bumpers or sharp edges. 

Mr Dixon advises against using automatic car washes during your car's lifetime, saying they "wreck your car". 

"It's not just your paintwork but they can also damage the wiper blades and the bodywork," he says. 

Check for warning lights

You'll need to take your vehicle to a trusted garage or mechanic for this. 

Exhaust emissions

Some diesel vehicles can fail their MOTs based on emissions. To avoid this, you can buy a fuel treatment pack and take your car for a good run to clear the fuel lines and tank.

Driving for at least 30 to 50 minutes at a sustained speed on a motorway or A-road should help to clear the filter. 

You should make sure the driver's view of the road isn't obstructed, so check for stone chips at eye level and remove any obstructions such as air fresheners and mobile phone cradles. 

What else should you think about? 

Make sure your car is clean beforehand, as a tester can refuse to do your MOT if the vehicle is filthy and full of rubbish. 

Giving your car a clean can also give you a chance to inspect it, Mr Dixon says. 

Another thing to do is to check last year's MOT for any advisories that might crop up this time. 

These potential issues will still be there - so it's best not to ignore them. 

You can check your vehicle's MOT history using  https://car-check.co.uk . 

Every Monday we get an expert to answer your money problems or consumer disputes. Find out how to submit yours at the bottom of this post. Today's question is...

I have worked at a bank for 24 years - the facilities are outsourced. This new company is bringing in a system where the staff have to click in and out and are then paid by the minute? Is this allowed? Amber

Ian Jones, director and principal solicitor at Spencer Shaw Solicitors, has picked this one up...

Your rights depend on your contract and what it says about payment. Does it specify an annual salary, or payment by time? Does it allow for changes to how payment is calculated?

If the contract does not allow for this type of payment, your employer may be trying to vary the contract of employment unlawfully.

If you're directly employed by the bank, and your pay arrangements are changing because of a new monitoring system, this would be an internal contract variation. If you work in the facilities department and the new contractor is taking over as your employer, the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) 2006 may apply. 

In this case, your current terms, conditions and previous service will transfer to the new employer.

TUPE may make the issue sound more complicated but, in practice, either way the changes will be valid only if the employee agrees to them.

If you have not agreed to the change, then this could be a breach of contract. This could give rise to a successful claim in the civil courts or the employment tribunal. 

If the breach is serious (for example, you're paid less than agreed in the original contract) and you resign in response, this could amount to constructive dismissal for which a claim can be made in the employment tribunal. 

It would be sensible to get the contract reviewed by a solicitor for advice. But act swiftly - if you continue working for the employer, you are effectively waiving the breach and accepting the change to your contract.

To make it possible to pay by the minute, employees may be monitored while at work. When collecting and processing data and using it to make a decision, the employer must comply with data protection laws. If not, the employee could be entitled to compensation, depending on the breach, or the employer could be at risk of a sanction by the regulator the Information Commissioner's Office.

This feature is not intended as financial advice - the aim is to give an overview of the things you should think about.  Submit your dilemma or consumer dispute via:

• The form above - make sure you leave a phone number or email address
• Email [email protected] with the subject line "Money blog"
• WhatsApp us  here .

Please make sure you leave your contact details as we cannot follow up consumer disputes without them.

We're back for another week of consumer news, personal finance tips and all the latest on the economy.

This is how the week in the Money blog is shaping up...

Today : Every week we ask industry experts to answer your Money Problems . Today, a reader's employer is bringing in a new clock-in system to pay workers by the minute - but is this allowed?

Tuesday : This week's  Basically...  explains everything you need to know about the PIP. 

Wednesday : We speak to one of London's top chefs for his Cheap Eats at home and in the capital.

Thursday : Savings Champion  founder Anna Bowes will be back with her weekly insight into the savings market.

Friday : We'll have everything you need to know about the mortgage market this week with the guys from Moneyfacts.

Running every weekday, Money features a morning markets round-up from the  Sky News business team  and regular updates and analysis from our business, City and economic correspondents, editors and presenters -  Ed Conway ,  Mark Kleinman ,  Ian King ,  Paul Kelso  and  Adele Robinson .

You'll also be able to stream  Business Live with Ian King on weekdays at 11.30am and 4.30pm.

Bookmark  news.sky.com/money  and check back from 8am, and through the day, each weekday.

The Money team is Emily Mee, Bhvishya Patel, Jess Sharp, Katie Williams, Brad Young and Ollie Cooper, with sub-editing by Isobel Souster. The blog is edited by Jimmy Rice.

By Jess Sharp , Money team 

Money saving trends are constantly popping up on social media - but one in particular has been gaining huge amounts of attention.

Created accidentally by a comedian, loud budgeting is breaking down the taboo of speaking about money.

The idea is based on being firmer/more vocal about your financial boundaries in social situations and setting out what you are happy to spend your money on, instead of "Keeping up with the Joneses". 

On TikTok alone, videos published under the hashtag #loudbudgeting have garnered more than 30 million views - and that figure is continuing to climb. 

We spoke to Lukas Battle - the 26-year-old who unintentionally created the trend as part of a comedy sketch. 

Based in New York, he came up with the term in a skit about the "quiet luxury" hype, which had spread online in 2023 inspired by shows like Succession. 

The term was used for humble bragging about your wealth with expensive items that were subtle in their design - for example, Gwyneth Paltrow's  £3,900 moss green wool coat from The Row, which she wore during her ski resort trial...

"I was never a big fan of the quiet luxury trend, so I just kind of switched the words and wrote 'loud budgeting is in'. I'm tired of spending money and I don't want to pretend to be rich," Lukas said. 

"That's how it started and then the TikTok comments were just obsessed with that original idea." 

This was the first time he mentioned it...

Lukas explained that it wasn't about "being poor" but about not being afraid of sharing your financial limits and "what's profitable for you personally". 

"It's not 'skip a coffee a day and you'll become a millionaire'."

While talking money has been seen as rude or taboo, he said it's something his generation is more comfortable doing. 

"I've seen more debate around the topic and I think people are really intrigued and attracted by the idea," he said. 

"It's just focusing your spending and time on things you enjoy and cutting out the things you might feel pressured to spend your money on."  

He has incorporated loud budgeting into his own life, telling his friends "it's free to go outside" and opting for cheaper dinner alternatives.

"Having the terminology and knowing it's a trend helps people understand it and there's no awkward conversation around it," he said. 

The trend has been a big hit with so-called American "finfluencers", or "financial influencers", but people in the UK have started practising it as well. 

Mia Westrap has taken up loud budgeting by embarking on a no-buy year and sharing her finances with her 11.3k TikTok followers. 

Earning roughly £2,100 a month, she spends around £1,200 on essentials, like rent, petrol and car insurance, but limits what else she can purchase. 

Clothes, fizzy drinks, beauty treatments, makeup, dinners out and train tickets are just some things on her "red list". 

The 26-year-old PHD student first came across the idea back in 2017, but decided to take up the challenge this year after realising she was living "pay check to pay check". 

She said her "biggest fear" in the beginning was that her friends wouldn't understand what she was doing, but she found loud budgeting helped. 

"I'm still trying my best to just go along with what everyone wants to do but I just won't spend money while we do it and my friends don't mind that, we don't make a big deal out of it," she said. 

So far, she has been able to save £1,700, and she said talking openly about her money has been "really helpful". 

"There's no way I could have got this far if I wasn't baring my soul to the internet about the money I have spent. It has been a really motivating factor."

Financial expert John Webb said loud budgeting has the ability to help many "feel empowered" and create a "more realistic" relationship with money.

"This is helping to normalise having open and honest conversations about finances," the consumer affair manager at Experien said. 

"It can also reduce the anxiety some might have by keeping their financial worries to themselves." 

However, he warned it's important to be cautious and to take the reality of life into consideration. 

"It could cause troubles within friendship groups if they're not on the same page as you or have different financial goals," he said.

"This challenge isn't meant to stop you from having fun, but it is designed to help people become more conscious and intentional when it comes to money, and reduce the stigma around talking about it." 

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