INNOVATION MANAGEMENT Essay

Topics: Innovation, App Store, Marketing Pages: 12 (2900 words) Published: December 7, 2014
INNOVATION MANAGEMENT

HUANG DA
1305535

In the essay you can choose ONLY ONE of the following questions: 1) How do people and organisation (e.g. culture, reward and recognition, and organisational design) help innovation to happen in Apple?

2) How does business model innovation create value for Apple? 3) How does the regional innovation system in Silicon Valley help facilitate innovation in Apple?

Introduction
With the rising of Internet economies, the electronic industry developed rapidly and new concept of business models kept arising. A successful business model innovation is often far more profitable to enterprises than the innovation in technology, products and management system. Only an enterprise has differentiation advantages, can it remain invincible in the fierce market competition, and business model innovation is a good way to achieve this, in this way, the enterprise can not only play its own advantages, but also make use of the partners’ resources in order to achieve a win-win situation mutually. Apple’s business model innovation has been widely recognized in the world, which laid foundations for Apple’s powerful dominance in innovation as well as some recessive values. As a technology company, Apple is by no means a hardware manufacturer simply, but the one who combine technology and products ingeniously, and then get great success through the business model innovation. Apple’s product brought changes to the market. IMac has changed the personal computer industry, iPod has changed the way of people’s music enjoying, and iPhone has become the benchmark of smart phones. Besides, “Product + Service + Platform” business model has become Apple’s core competitiveness. Based on the “Rothwell’s 5 Models of the Innovation Process”(Jun, 2013), this essay will take Apple’s “iPod+ iTunes” model and “iPhone+ APP store” model as examples, in order to explore how business model innovation create value for the Apple. This essay is mainly composed of four parts including introduction, Concept of business model innovation, a case analysis based on Apple and conclusions 2 Concept of business model innovation

A business model is a kind of system which is composed of products, services and client relations. A business model contains every participant and the roles they played in process, as well as each participant’s potential benefits and sources of revenue. A business model innovation has to define the types of customers and choose the segment market, based on which provide value proposition and appropriate products or services to meet customers’ demands. Services and Products are provided to customers through certain channels, at the same time, enterprises gain profit from customers and also develop relations with customers in form of giving support to them (Foss and Stieglitz, 2014). In addition, business model plays an important role in the industry value chain, not only determines the relationship between enterprises, but also create values for customers. Therefore, business model innovation is the critical factor to an enterprise’s stable development. Generally speaking, there are six ways lead to business model innovation: Firstly, defining the customer’s demand; Secondly, providing special products and services; Thirdly, creating a new channel to provide products or services; Fourthly, sharing the revenue in a new way; Fifthly, reforming on After sale service system; The last is to build a unique network of marketing (Chesbrough, Di Minin and Piccaluga, 2013). Both of these ways can be used alone, but combining two or more of them may work a lot better. Apple integrated a variety of methods masterly and created a unique business model as result. Next, the essay will make a further study on Apple’s business model innovation. 3 A case analysis based on Apple’s business model innovation Apple's attraction lies not only in the perfect combination of fashion and new technology, but also in integrating the...
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