Business Concept Innovation In Apple

business concept innovation in Apple

The business concept innovation of apple will be analyzed by several business models. One of them is the concept of Gary Hamel .

He defines the business concept innovation as following:

 "Business Concept Innovation is the capacity to imagine dramatically different business concepts or dramatically new ways of differentiating exiting business concepts"

 Business conept innovation changes the basis of competition in an industry

 A Business Model is simply a Business Concept that has been put into practice

Moreover Hamel distinguishes 2 kinds of innovation:

 The first is innovation regarding the firm's historic strategy (change own strategy)

 The second is innovation with respect to the firm's industry and competitors (proactively reinvent the industry)

Succeeding at both kind of innovation is not easy. Few companies, herein Apple, are skilful enough to do both.

Hamel states that a business concept comprises four major components: customer interface, core strategy, strategic resources, , and value network. Between the components are other three elements that link and relate them: configuration of competencies, customer benefits, and company boundaries.

Unpacking the Hamel's Business Model

1) CUSTOMER INTERFACE

 Fulfillment and Support

Apple reaches customers and "goes to market" in different ways:

 through advertisements, promotion activities and particular company design

 by creating successful branding

 by using assorted network possibilities

Apple collects information about costumers needs and fulfills them by different costumer programs:

 ProCare program - help and tips for customers - everything needed to get the most out of Mac's. This program includes six possibilities to get knowledge about the Mac's. It is available only at stores.

 The Studio - the place to go to help to bring customers creative projects to life (movie, a photo album, a song, or a presentation). For customers, who have visions, ideas. Creative professionals give technical expertise and suggestions. Online reservation possibility.

 Genius Bar - the place to go for advice, insight, and hands-on technical support for Mac's or iPod's. In the Genius Bar work the most knowledgeable Mac - people.

 Free Apple Workshops - possibility to extend the knowledge, boost skills, and meet people that share the same interests. Qualified Mac Specialists present tips, tricks, and advice that get costumers up to the next level.

Apple created an advanced support system. It is possible either to extend a product service and support coverage or to get professional consultation with AppleCare. On the Apple's support homepage customers get help to answer each question about Apple's products.

 Information and Insight

Knowledge that is collected from and utilized on behalf of customers.

Apple knows customers needs and preferences. People want to have modern and pre-eminent products - that is exactly what Apple does. Costumers know the high quality of Apple. Products design is very simple and adequate to them handling (use friendly). This is probably one of the reason why Apple's products are so successful sold.

 Relationship Dynamics

Apple's communication system is very easy and widespread in the internet. Everything about and from Apple is available through internet: buying products, service like support, advices, consultations. Apple created also a new, very cheep way of buying music (songs files) and movies by using iTunes program.

 Pricing Structure

Based on the iTunes downloading pricing structure example.

In 2005 at a press conference in Paris, Steve Jobs - Co-founder of Apple, said that the result of variable pricing would be more piracy: "If they want to raise prices, it's because they're greedy. If the price goes up, people turn back to piracy - and everybody loses."

Through iTunes Apple is dealing with non- physical formats. Steve Jobs claims that is the reason why higher demand should not mean higher cost. "There is no scarcity of stock for popular music sold on iTunes: in theory, it can be downloaded by an infinite number of people".

Variable prices rely on supply and demand. In internet sales (downloading) there are no supply limits. That is the reason why Apple doesn't variable pricing in iTunes case.

Pricing Structures for other Apple products are variable - depend on models and memory capacity.

2) CORE STRATEGY

Core Strategy explains the way of company's competing manners. It includes three elements:

 Business Mission

It is a summary description of an entity's purpose. It is typically included in the Articles of Incorporation.

Apples mission's statement is:

„change the world by bringing computer to masses".

According to this statement it is easy to find out that the business was not only created for making personal computers but also for spread pc's to the masses. Apple's idea is to make technology simple.

 Market