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INNOVATION AND TECHNOLOGY MANAGEMENT

Number of Words: 2480.

INTRODUCTION:
The words Innovation and Invention has often been confused and misinterpreted. It is known that innovation and invention are related but they are not the same. Innovation is considered to be the broader perspective; from Myers and Marquis (1969), Innovation is not a single action but a total process of interrelated sub processes. It is not just the conception of a new idea, nor the invention of a new device, nor the development of a new market. The process is all these things acting in an integral fashion. Innovation = Theoretical conception + Technical Invention + Commercial Exploitation.

The conception of new ideas is the starting point of innovation. A new idea is a very interesting prospective, but its merely a concept. The process of converting intellectual thoughts into a tangible new product or service is an invention. At this stage science, technology and hard work by different people come to produce the product and improve a company performance. The later part involving the work towards companys growth and performance is called exploitation. This complete process is represented as innovation. Thus Trott (2008) depicts: Innovation is the management of all the activities involved in the process of idea generation, technology development, manufacturing and marketing of a new (or improved) product or manufacturing process or equipment.

Fig: 1.1. As seen in picture Fig:1.1, to explain the process of innovation, we need to explain the important factors involving a firm managing innovation, strategic alliances and NPD (New Product Development) etc. In this essay Innovation and its allied processes are better explained with inclusion of a company as an example. Apple is worlds most innovative companies from Business Week (2006) and Fortune magazine named Apple the most admired company in the United States from 2008 to 2012. It is also now known as the largest technology company in the world by revenue and profit, more than Google and Microsoft combined. Hughes (2012) But Apple is not only admired in US, it has built itself a name which inspires loyalty in every customer around the world. Apple has achieved such an unimaginable feat by its innovative technology which differentiates itself from everyone else in the same field. In this essay we can identify and analyse the important aspects of Innovation found in Apple to explain the correlated factors present within a firm for managing technology and innovation.

INNOVATION and INVENTION THROUGH TIME:

From National Post (2006) we get the gist of Apples Historical background. 1968 At age 13, Steve Jobs befriends Steve Wozniak in the Hewlett-Packard Explorer's Club near his home in Cupertino, Calif., where Apple is headquartered today.

1975 Jobs and Wozniak start attending meetings of the Homebrew Computer Club in nearby Menlo Park, Calif. Wozniak comes up with the design for what would become the Apple I, he and Jobs show it off to members. 1976 On April 1, Jobs and Wozniak incorporate Apple Computer Inc. A local store called the Byte Shop starts selling Apple's first computers. 1980 Apple issues stock to the public. Jobs and Wozniak become millionaires. 1983 Sensing their company needs more corporate direction, Jobs and Wozniak hire John Sculley from Pepsi-Cola to become Apple's president and CEO. 1984 Apple introduces its Macintosh computer, to the world with a landmark commercial during the Super Bowl. 1985 Wozniak resigns to start another company that focuses on home video. After Apple reports its first corporate loss, Sculley announces a major reorganization. Jobs is forced out of the company. 1986 Jobs starts a new company to create computers and software for college students and academics. He calls it NeXT. The same year, he pays US$10-million to buy Lucasfilm Ltd.'s computer graphics division, Pixar Animation. 1993 Sculley resigns as Apple's CEO and is replaced by Michael Spindler, an Apple veteran who rose through the ranks. Apple ships its first Newton, a hand-held computer and predecessor to the personal digital assistants that are now commonplace. 1994 With the company teetering on bankruptcy, Spindler is replaced by Gil Amelio, a former CEO at National Semiconductor. Apple introduces the Power Mac line. 1996 Apple buys NeXT for US$430-million and offers Jobs the role of consultant. NeXT's software becomes part of the foundation of Apple's future operating systems. 1997 With Apple still struggling, its board pushes out Amelio and names Jobs its "interim" CEO. Jobs later dropped the "interim" title. 1998 Jobs cuts ties with Apple clone makers. He phases out the Newton, and he also introduces Apple's colourful line up of iMacs. 2000 Apple introduces the G4 Cube. It bombs and is discontinued. 2001 Jobs and Apple introduce the iPod and a revamped iTunes, forever changing the world of digital music. 2005 Jobs unveils a video iPod and announces he has struck deals with CBS, NBC, Disney and other networks for content. Revenue up by 70% on the same period a year ago; profits up by 530%. As for coolness, Apple remains off the charts. The iPod, its portable music-player, seems unstoppable. And, two decades after launching the personal-computer revolution, it is

Mr Jobs who continues to push it furthest. On April 29th, Apple released Tiger, its latest operating system. The cognoscenti queued for several blocks around Apple's flagship store in San Francisco to get it. The Economist (2005) 2006 Jobs announces in January that Apple has started shipping computers with Intel Corp. processors. Apple's stock hits US$86.40, a new high, that month. Also, Walt Disney Co. agrees to buy Pixar for US$7.4- billion in stock. The deal will make Jobs the biggest shareholder in Disney. In February, Jobs introduces the revamped, remote- controlled Mac mini, which can stream music and videos from home computers, plays DVDs, CDs and can connect to home televisions. He also introduces the iPod HiFi home stereo system.

During fiscal 2007, the Company began selling the iPhone and Apple TV. July 2008, the Company began selling iPhone 3G, the second-generation iPhone, and at that time significantly expanded distribution by establishing carrier relationships in over 70 countries. Unit sales of iPhone 3G have been significantly greater than sales of the firstgeneration iPhone. March 28, 2009. The Company posted revenue of $8.16 billion and a net quarterly profit of $1.21 billion, or $1.33 per diluted share. 2010 Launch of New iPod and iPad. 2011 Release of iPad 2, iPhone 4S and new heights scaled by Apple. Financial Feats which seemed like a dream last decade are possible now. The innovation and growth continues. . .

INNOVATION WIITHIN FIRM:


From innovation through time we get to know that, apple through-out the years has followed innovation and creativity with all of its products. Apple has always aimed for blockbuster products and services which aim to give an exceptional profit growth. But this game changer process is clearly a huge bet since it might also end in exceptional losses if all the products have to be discontinued. Establishing departmental functions to perform the main tasks of business strategy, R&D, manufacturing and marketing doesnt resolve the firms problem. Innovation is extremely

complex and involves absolute management of a variety of activities. As seen in Fig: 1.2, leaders need to become game changers; CEO must lead charge on repeatable growth through innovation. According to Business Week and Boston Consulting group (2006) Innovative Chief executive of Apple is considered to be an indicator for major innovative capability. There are lots of innovation models and processes followed by firms; which process or model followed will entirely depend on the needs, organisational strategy, R&D advantages, and new product development strategy of the firm.

Fig: 1.2. Game Changer Innovation Cycle process.

R&D and NPD:


Apple is a company in which divisions are based on special groups which work on one purpose and one result. Most of the times the members in a group will never even know which product are going to incorporate their result in it. Specialist groups are formed in order to find the best talents in each sector of specialization. R&D divisions are headed separately for every specialization by this better coordination and workforce concentration is attained on the product. R&D facilities are concentrated in one area even though they have separate divisions for each element, this is done in order to minimise the risk of technology or information leak. This shows Apple follows a centralized internal R&D. There are various ways to go about organising Industrial R&D. They can be separated into Internal and External R&D, which can be further classified into centralised laboratories, Decentralized, Internal market contract, collaborative, consortium, open source.

Fig: 1.3.

New Product development is considered or assumed to be the major growth strategy. So, from Ansoff matrix we can find our situation and strategy needed in new product development. Apple considered itself favourable in diversification with new market and products consisting of IPad, IPhone product lines. Apple also tended to follow Product development; in case of IPod technology, Apple was an early adopter but it developed its product beyond competing level of other portable music players.

STRATEGY AND CONTROL:


Apple manufacturing units are present in china to use economy of scale and every product is exported worldwide from there to storage or to strategic alliances. Apple doesnt have any partners in form of R&D or manufacturing and franchising mode of entry is also avoided. In order to maintain its control on the value chain or global brand loyalty, every aspect of business is scrutinised and processed by Apple. Apple also maintains the policy of providing same service and goods to every customer in the world; its known for its uniformity irrespective of the country. In terms of Licensing, Apple experienced lots of Mac cloning in the past which resulted in lots of legal complications and resulted with license termination for the clone making companies. Since then the licensing rights for technology has not been shared with any company and only a few cross adopting licenses have been given. Ex: MS Office with Microsoft

Fig: 1.4

Organisational structure till 2011 was as below shown in picture Fig1.4. Currently Tim Cook is the CEO of Apple Inc. and most of board members and directors of the organisation remain unchanged. Apple maintains a pleasant and feel good environment for its workers. But, the responsibility is taken by each and every member for their own project which integrates the organisation into a closely knit pack. Control Structure and Organisational power remains centralized as seen above; this is mainly done in order to align every member in the organisation to meet the goals and requirements set by the firm.

Alliances and IJVs:


There have always been International joint ventures and alliances throughout the history of Apple in order to upstream the value chain activities or to supplement its own products and services. These alliances and IJVs are mainly important to market Apples innovation and to create supply chain all through the world. We can see them below as gathered from The Economist (2005) 1991- Apple, IBM and Motorola. 2005-Apple and Intel. 2006- Apple, Ford, GM and Mazda. 2006- Nike linked with Apple. 2009- Starbucks and Apple. Coco Cola, HP and American Online.

The United States is the home market for Apple, where it has established a strong foot hold with more than 300 stores. The case of Europe is also similar; Apple has stores and business set up where there are favourable economic and political conditions. Ex: Sweden, which has a risk rating of A1-, has a quality business environment which in turn will have a positive effect on corporate payment behaviour. Similarly corruption rates are lower and Sweden ranks among the top 20 ease of business doing rankings. In case of countries which have business environments that are not so favourable as Europe or the US; there exists uncertainty and risks. Apple has introduced online store mainly countries of this background. Ex: Venezuela, with C risk rating; Economic and political uncertainty is high which will result in high risk of non-payment.

Apple has also made alliances with telecommunication giants like AT&T, Virgin, Orange, in order to make Apple iPhones available to customers as a part of contract phones. In some countries where demand for Apple iPhones is moderate, they can be purchased only through a service provider. Ex: Apple iPhones sales through Bharti Airtel in India.

GLOBAL INNOVATION AND MISSION:


Apples mission has always been to stay competitive, keep on innovating and to maintain their image of differentiation. Global thinking+ Local Implementation= GLOCAL STRATEGY. The innovative differentiation of their products started with the introduction of 1st Apple computers and a revolutionary Operating system which didnt provide architecture unlike the more competitive windows. However this strategy will fail if the company has any of the following defects: Lack of global perspective, Focus on short term goals, Organisations without clear mission, Lack of customized delivery system, Resources without fine tuning and Lack of localisation. But, Apple has successfully tackled all of the concerns related to this strategy because of its long history and mature corporate behaviour.

Fig: 1.5

Other than Macs and OS, All their electronic consumer products are also of Innovative background and the likes of which has never been competed in the global market:

1. IPod is the innovative second mover to the market which revolutionised the portable media business. 2. ITunes and App Store are also one of a kind innovation made by Apple which has almost made their business monopolistic in view of many. 3. IPhone is one of a kind fast processing smart phone which has been the most sold smart phone ever and it is expected to increase its market for the foreseeable future.

4. IPad was the last prodigy of Jobs and it rules the tablet market in every country. It has produced uniformity in product and service provided to every customer located throughout the span of earth. This commonality of services has differentiated them from all other companies which tend to adopt their products according to the local markets based on their culture and country needs. Apples history has been full of innovations in product development, concentrating mainly on R&D. Apple has held on to its roots of innovation for a long period of time. The failures have proven to be a good lesson in its pathway to everlasting success which is seen currently. Thus we have studied various aspects involved in innovation and how innovation works within a firm by depicting an example of the Apple Inc. which has innovation from inception of its base to current humongous growth.

REFERENCE:
"America's Most Admired Companies". Fortune. Retrieved from: http://money.cnn.com/magazines/fortune/mostadmired/2009/full_list/ Anonymous. Al Bawaba [London] 23 Apr 2009. Retrieved From: http://search.proquest.com/docview/194828652?accountid=17193 "Apple Retail Store Store List"(USA). Apple Inc. Retrieved from: http://www.apple.com/retail/storelist/ Business: New Best Friends (Jun 11, 2005). The Economist 375. 8430: 66. Retrieved From: http://search.proquest.com/docview/224012932?accountid=17193 Business: The obsessiveness of Steve Jobs; Apple Computer (May 7, 2005). The Economist 375. 8425: 72. Retrieved From: http://search.proquest.com/docview/224013280?accountid=17193 Business Week (2006) The Worlds most innovative firms, April 24. Don Mills, Ont (2006, Apr). National Post : FW8 Hughes. N.(2012) Retrieved from: http://www.appleinsider.com/articles/12/02/09/apple_now_worth_more_than_google_a nd_microsoft_combined.html

Myers, S. and Marquis, D.G. (1969) Successful industrial innovation: a study of factors underlying innovation in selected firms. Washington D.C: National Science Foundation.

Trott, P. (2008) Innovation Management and New Product Development. Essex: Pearson Education Limited, 4th ed.

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