Production Decisions Case study of Apple Inc.
Apple Inc. is a multinational company that is based in US. It manufactures computer software, electronics and commercial servers. The electronics include Macintosh, iPod, iPhone and the iPad. The computer software includes Mac OS X operating system, iTunes, iLife, iWork, Aperture, Final Cut Studio, and Logic Studio (Markoff, 2007).
Apple Inc was established in 1976 in Cupertino, California. It was then incorporated in 1977. Initially the company was called Apple Computer Inc but changed to Apple Inc after thirty years. The changes were made due to the investment in computer electronics in addition to the computer software. A survey done by Harreld (1997) more than 35,000 people have been employed by the company in the world. The company has maintained a high consumer profile. Customers to the company have a high loyalty for the brands of the company and this has placed the company strategically in the market. The reputation of the company has gone far and wide due to the innovative products that are established to match the consumer demand (Fisher, 2008).
The founders of the company were Steve Jobs, Steve Wozniak and Ronald Wayne. Wayne sold his shares to Jobs and Wozniak later and the company became the ownership of the two partners. When the company was being established the partners had inadequate funds to produce their products. Mike Markkula provided 250,000 and business ideas to the partners and they were able to establish the company (Chaffin, 2001). Steve Jobs is the Chief Executive Officer of the company and works with other executives to ensure the proper running of the business. Since last year Steve Jobs has been ill and Tim Cook has been the acting president of the company. A team of directors work together with the executive committee to develop management and production strategies of the company. More than 75,000 people have been employed by the company all over the world since it was established in 1977. Most of the employees are located in US but the company has other operations in several countries (Fisher, 2008).
The company started manufacturing Apple I computers which were basically a motherboard. Most of the features found in the modern computers, such as the keyboard, monitor and the case, had not been fixed. Apple I was developed and the second product, Apple II, had more features which competed in the market against many other products in the market from other companies. Apple III competed strongly with products from IBM and Microsoft in the computer market (Spector, 1985).
Apple has experienced a lot of competition from many companies. Microsoft has been the major competitor in the market. Several conflicts have cropped up in the market due to the high competition. For example, Apple sued Microsoft for using GUI similar to Apple Lisa. There are other market conflicts which have affected the activities of Apple (Markoff, 2007).
Apple has allied with several companies to establish products which integrate technologies from many companies. For example, in 1994 Apple formed a partnership with IBM and Motorola to establish the AIM alliance (Apple Inc, 1998). The alliance led to the creation of new computing platform. Apple also formed partnership with Microsoft to create new version of Microsoft Office for the Macintosh (Fisher, 2008).
According to Claura (1997), acquisition of other companies has been a strategy that has been used by the company to expand on the production activities. Apple has acquired several companies to increase its professionalism and production of consumer oriented products. For example, Final Cut software from Macromedia was purchased by Apple in 1998. This enabled the company enter into the business of digital video editing. The iMovie products and Final Cut Pro were established from the Final Cut software. These products expanded the market for the consumers and professional customers of the company. Nothing real was purchased in 2002 which led to the establishment of Shake and Emagic (Hormby, 2005).
Apple has used many strategies to compete in the market. The company has employed a strong research team to conduct research about the market for its products. The company has been able to compete in the market by establishing market driven products. Apple Inc established the strategy of creating retail stores in many countries to market its products directly to the consumers (Apple Inc., 1997). Online stores have been established to ensure the customers access the products more easily through the internet. The use of e-commerce has been encouraged by the leaders of the organization. Modern technologies in marketing such as e-retailing have been used to capture a large market. The first retail stores were established in 2001 in Virginia and California. Apple established the iTunes stores in 2003 (Coventry, 2006).
The current products of the company are Mac and accessories. These include Mac mini, iMac, Mac Pro, workstation, MacBook, MacBook Pro and Xserve (rack mounted). The computer accessories for Mc computers are made up of AirPort, Time Capsule, Magic Mouse, Cinema Display and Apple USB Modem (Wilson, 2007). Other products are iPad which is used to run the iPhone OS, iPod digital music player, iPhone, Apple TV and others. The software products being manufactured by the company are Mac OS X v10.6 Snow Leopard, iDVD, iMovie, iPhoto, iTunes, GarageBand and iWeb and others. Professional software are also produced by the company such as Mac OS X Server, Apple Remote Desktop, WebObjects, Java EE, Xsan and others. Online services are also offered by the company, for example, the MobileMe (Hormby, 2006).
The concept of entrepreneurship has been widely used by the company to develop the products. Innovation has been a strategy that the management of the organization has encouraged (Hormby, 2005). Innovation involves implementation of new ideas to create products which are competitive in the market. Most of the products of the company have created a lot of demand due to their innovative features and their ability to match the demand of the customers. Risk taking is an aspect used in entrepreneurship. Risk taking involves investing in ideas which are uncertain. Uncertainty is a concept in risk taking which the entrepreneurs use to get premium benefits from the business ideas. Risky business activities are associated with high benefits. Apple Inc has involved in many risky activities. These activities have increased the benefits to the company (Coventry, 2006).
The management of the organization has used leadership styles to create a good production system. Leadership is the process where the employees are encouraged to contribute willingly to the activities of the organization. The employees of Apple are motivated to carry out their duties to enable them be innovative in their work. Innovation of ideas has contributed to a great extent to the success of the organization (Colvin, 2009).
Globalization strategies have been adopted by Apple Inc to capture the global market. The company has formed partnerships with many governments to penetrate the global markets and to create more opportunities to the products of the company. The decision to expand globally has been accepted by many stakeholders in the industry. Apple has received an international recognition and almost all countries have accepted the products from the company. Apple Inc has been affected by the current economic crisis which hit all the economies in the world. The global recession caused a reduction in the market for the products of the company. This was an international problem which affected all the industries and Apple was not an exception. The company is recovering from the economic meltdown and has registered a growth in the sales from the beginning of this year (Colvin, 2009).
Conclusion
The decision about what a company should produce should be developed from the consumers of the company. The consumer is the most valuable asset any organization has and should be placed in the first priority when developing the products of the company. Adequate market research should be conducted about the demand of the consumers to develop products which match the needs of the customers. The resources of the company also dictate the production decisions to be adopted by the firm. Such resources include human resources, finances, and legal capacity of the organization, managerial resources and many others. All the stakeholders of the organization should be involved in the decision making process when developing the product as well as when establishing the marketing strategies. Apple Inc has established strategies to capture the market for computer software and electronics. The production system of the company has integrated many stakeholders to develop products which create high demand in the market. The company has formed many partnerships with several stakeholders in the market to develop products which match the demand of the market. Production decisions should be focused on the needs of the customers as well.