The Innovation Death Spiral - Essay Example

Critical Evaluation Of About 4 Pages On The Accenture Article On The Innovation Death Spiral Table of Contents Introduction 3 Article review 3 Discussion 4 Conclusion 6 References 7 Introduction In this age, innovation is the most essential requirement of any organization in order to improve its image and sustainability in the market. Keeping this fact in mind, the most reputed and the leading market leader in computer hardware and software, Apple Inc desired to develop varied types of inventive products and services. The prime behind this innovation technique is to beat the downfall of the profits in the recessionary phrase. Although the idea of innovation of various products, proved effective for a very limited time-period but then, trapped in the phenomenon of innovation death spiral. Article review According to the CEO of Apple Inc Tim Cook, innovation may create new market share and new customers for the organization. In order to fulfil such views, the organization created a new invention named Apple i-pad. This proved extremely effective for the organization in the age of recession in order to amplify its profit margin and productivity. However, after a very small period of time, the organizational performance started declining significantly thereby reducing its image and reliability in the market among other rival players as presented by the below figure. Source: (Mysticdots, 2012) Therefore, as per Mr. Tim Cook, the organization of Apple Inc became trapped in the process of ‘Innovation death spiral’. According to this process, the organization develops new products with the desire that it might present high results but yields up with disappointing results. However, in order to balance such a phenomenon, Tim Cook, implemented balancing innovation strategy in order to rectify such trouble, as innovation is considered as an engine. Discussion In order to retain the portfolio and reputation of the organization, Tim Cook decided to offer higher concentration over the field of research and development. Only then, the organization might analyse and evaluate the demands and preferences of the customers in an effective way (Innovation management, 2011). So that, after developing and launching the products, it might offer high-ended results to the organization of Apple Inc that might amplify its net income and market share. In order to do so, the CEO, Tim Cook developed varied types of products such as I-pad mini, iphone 5, iMac and many others. By inventing a series of above mentioned products, the total sales of the organization of Apple Inc increased by almost 50 percent in the period of recession as well as compared to other rival players such as Microsoft (Mysticdots, 2012). Apart from this, in order to save the organization from falling in the trap of ‘innovation death spiral’, the CEO of Apple Inc decided to implement the concept of balanced innovation. However, the concept is implemented keeping in mind, the three kinds of innovations i.e. incremental, platform and breakthrough. Incremental innovation is a sort of introduction that do not offer high-ended benefits to the customers and due to which the rate of profitability also remains in a standstill position. For example: the innovation and launch of i-pad of Apple Inc offered similar results. This means, the product was not a much successful in the market and so its profitability and market share remained quite low in this time period. However, in case of platform innovation, both the demand of the customers and market share increases with the launch of the new products, but it retains for a small period of time. For example: introduction of I-phone proved effective for the organization of Apple Inc for a limited period of time that amplified its customer base and net income by almost 69 percent in the market as compared to its biggest rival player, Microsoft (ESOMAR, 2008, pp. 234-245). Similarly, the organization of Apple Inc also implemented the strategy of breakthrough innovations. In this concept, the organization tried to discover inventive featured products so as to enhance its dominance and supremacy in the market among other rival contenders (Accenture, 2013). Not only this, implementation of this strategy might also enhance the profit margin and reliability of the brand in the market thereby amplifying its competitive advantage in the market. For example: introduction of i-Mac by Apple Inc presented similar scenario. After launching the product, i-Mac (Forbes, 2011), both dependency and market value of the organization of Apple Inc increased as presented by the below graph. Source: (Forbes, 2011). Therefore, it might be clearly depicted that in order to save the organization from the trap of innovation death spiral, the organization of Apple Inc implemented balanced innovation as described above. Other than this, in order to increase the market share and brand image of the organization of Apple Inc, it might try to introduce high-ended digital cameras. This might enhance the profitability and net income of the organization by almost 70 percent as compared to other rival players (Bradley, 2007, pp. 123-133). Moreover, due to the introduction of such type of devices, the organization might attain a wide range of customers that may improve its portfolio and dependency in the market. However, by entering in this segment, the threat of substitute products of rival players might also be reduced to a significant extent (Drummond & Ensor, 2006, pp. 156-167). This might improve the demand and market value of the organization in the market among others. Conclusion Conclusively, it might be stated that in order to retain the reputation and dominance of the organization, innovation is essential. However, it needs to presented, only after high-end research and analysis. By doing so, the organization might easily analyse the demands and requirements of the customers that may offer effective results for the organization after developing the products. Along with this, it might also improve the productivity and reliability of the organization in this age of competitiveness among other rival players. Other than this, if the products are invented through the concept of balanced innovation then it would surely prove effective for the organization of Apple Inc in this aggressive age. Moreover, it might also reduce the threat of new entrants, threat of substitute products thereby amplifying its strengths and opportunities. Along with this, the competitive position and sustainability of the organization of Apple Inc might get enhanced as compared to existing contenders. References Accenture, 2013. Accenture APAC-Bank. [Online]Available at: http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-APAC-BNK-BrightIdeas.pdf [Accessed on 28th February, 2014]. Bradley, N. 2007. Marketing Research: Tools & Techniques. New York: McGraw-Hill. Drummond, G. & Ensor, J. 2006. Introduction to Marketing Concepts. New York: Cengage Learning. ESOMAR. 2008. Market Research Handbook. London: Sage. Forbes, 2011. Why No Apple In The Food Industry -- Part 2: The Accenture Innovation Engine. [Online]Available at: http://www.forbes.com/sites/stevedenning/2011/08/09/why-no-apple-in-the-food-industry-part-2-the-accenture-innovation-engine/ [Accessed on 28th February, 2014]. Forbes, 2011. Chart showing the growth of Apple Inc, Iphone. [Online]Available at: http://www.forbes.com/sites/markrogowsky/2013/10/11/5-charts-that-show-apples-plateau-after-a-meteoric-rise/ [Accessed on 28th February, 2014]. Innovation management, 2011. Avoid the innovation-death-spiral. [Online]Available at: http://www.innovationmanagement.se/2011/10/27/avoid-the-innovation-death-spiral/ [Accessed on 28th February, 2014]. Mysticdots, 2012. Death spiral of Apple. [Online]Available at: http://www.mysticdots.com/2012/01/innovation-death-spiral-by-accenture.html [Accessed on 28th February, 2014]. Pcubed, 2013. The Infinite Journey of Innovation: An Interview with Microsofts Simon Floyd. [Online]Available at: http://www.pcubed.com/bulletins/2013.08/?A=1 [Accessed on 28th February, 2014]. Read More