Formation of Apple Start-up - Case Study Example

Number Apple’s Product Development Process This paper is an insight into Apple Inc., one of the largest consumer electronics manufacturer in the world and the most admired company in the world in 2012. The product development process of the company will be put into focus as well as how its products affect the generic product development process. An analysis of the problems and challenges that Apple undergoes during the management of the product development process will also be done. The product development as we learnt is the activities undertaken by a company starting from the perception of a market opportunity to the eventual production, sale and delivery of the product. The product development process of Apple has been a mystery to many. Adam Lashinsky seeks to demystify Apple in his book, Inside Apple: How America’s most admired and secretive company really works. All Apple’s products are developed using this process: a) Design of the Product Each product at Apple is developed first and foremost from its design. The company lays a lot of emphasis on the designs of its product and the designers assigned to work on the design of each product must conform to the company’s vision. The designers at Apple are highly regarded by the company’s management because the firm is highly critical to the design of the products it brings to the market (Lashinsky, 2012). This is in contrast to other rival companies who leave the design aspect of their products to the manufacturing departments. For Apple, there is no limit as to the amount of resources that its designers can use; the designers have no contact with the finance departments and have unlimited resources at their disposal. The company’s design studio, where all Apple products are first generated, is only accessible to a handful of employees so as to keep the new product designs in secret. b) Formation of Start-up If the company decides to go forward with a product, it organizes a team that is separated from the rest of the company using secrecy agreements or even physical barriers. The teams working on specifically sensitive new products are segregated in their own section of the building that is locked to limit entry of unauthorized personnel (Lashinsky, 2012). The formation of this start-up is to ensure focus of the team only in the development of the product and taking it to market. The team is only responsible to the executive arm of the company so that it is freed from the laid down organizational structure. c) New Product Process After the onset of the design development process, Apple structures the whole development process in a document that outlines the steps that will be undertaken in detail (Lashinsky, 2012). The blueprint of the development of the product is laid down including those responsible for each stage of the process, who will work on what stage and the estimated time of completion of the whole process. d) Product Review At any given time Apple has very few products that it has in production, this is to ensure that the company focusses on the development of high quality products. The executive team keeps tabs on the development process of each product by reviewing the progress of each team. The reviews are conducted every Monday and in case a product does not get a review, it is pushed to the next Monday for a review (Lashinsky, 2012). This ensures that no product stays for more than two weeks before a key decision is made on its development process. e) Bringing to Fruition Apple assigns two people to ensure that the product is brought to fruition once its production commences; the EPM and the GSM i.e. engineering program manager and global supply manager respectively. The program manager is very powerful and is nicknamed the ‘EPM Mafia’ due to the total control possessed in the product development process (Lashinsky, 2012). The company produces its products in China due to the lower overhead costs incurred in relation to America. Both the EPM and GSM are positions held by executives who are mostly in China to oversee the production process and to make key decisions that are best for the company’s products. f) Refinement and Testing When the production process is complete, Apple redesigns, rebuilds, and retests the product all over again. There are numerous leaks of the company’s products designs mostly coming from factory workers in China who are paid to leak a prototype of a product. To prevent this, once Apple completes the production process, it rebuilds and redesigns the product again sending it through the production channel a second time. This explains why there are a number of versions seen for Apple products. The whole process takes about four to six weeks which is culminated by a gathering of the responsible employees at the China factory. The program manger then takes the redone product back to the company’s headquarters in California, USA for examination and returns it to China for any iteration considered (Lashinsky, 2012). This means that Apple develops and completes many versions of a specific device making it an expensive endeavor of making each of the company’s products. g) Launch of the Product Apple develops an action plan for the launch of the product that is coined, the Rules of the Road. The action plan is outlined in a secret document that lists the milestones of the product’s development process and the persons responsible for each milestone. This document contains clauses of non-disclosure and those who reveal the contents of the document are terminated with immediate effect (Lashinsky, 2012). The company is so shrouded in secrecy that it is said that the non-disclosure agreement that employees sign will also never be revealed. Challenges and Problems in Managing the Product Development Process The first challenge that Apple faces during the product development process is the high cost of developing its products. The company invests a lot in making a single product so that the product is unique and this proves to be a high risk venture. Apple makes many variations of a single device to ensure that it gets the perfect product to the market and this large investment made by the company is usually risky since the company is not guaranteed that it will eventually pay off. As we learnt in class one of the main challenges facing most companies in the product development process is the economic aspect of the process. There is always that risk that the investment made by the company may not result in adequate returns. Apple must therefore look into ways in which it can reduce the cost of developing its products so as to reduce the risk it exposes itself to in case the product does not do well in the market. The consumer electronics industry is one of the most dynamic industries since the consumers’ tastes and preferences change frequently. The competition in this industry is quite fierce and the major companies are always on the lookout for ways to gain a competitive advantage over its rivals. The numerous leaks that Apple has had to deal with especially by factory workers in China, is a serious challenge to the company. This is because if the leak eventually ends up in the hands of its rivals, the prototype could be made into the final product much faster by Apple’s competitor and once it is brought to market there is not telling which company invented the product. Apple has done its best by ensuring that employees who come into contact with the prototype of a device sign non-disclosure agreements and in cases of violation of the terms of the agreement lead to the immediate termination of employment (Thomas, 2012). By so doing, this was an example of managing the product development process to ascertain the whole process is completed and the product is brought to market. Works Cited Lashinsky, A. (2012) Inside Apple: How America’s Most Admired–and Secretive–Company Really Works. John Murray Thomas, J. (2012) The Secret World of Apple Product Development. Read More