Essay on Lead User Source of Innovation for Apple Inc

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554 words
Carnegie Mellon University
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As outlined by Baregheh, Rowley, and Sambrook (2009) the success rate of the innovative model is dependent on internal and external business factors. These factors include technology, market, economies, and diseconomies of scale among others (Varis & Littunen 2010). Therefore, the innovation method adopted by an organization must analyze these factors and come up with the most practical model. The innovation approaches include but not limited to incongruity, process and structures, disruptive or unexpected, market lead, and user-oriented innovations. The paper examines the applicability of the lead user innovation as adopted by the Apple Inc.

Apple is an international technology based corporation that specializes in manufacturing, marketing, and distribution of technology products such as phones, computers, and support products. In 2015, the company recorded revenue of 234 Billion, which was a 16% increase from the previous year. Subsequent the large market size of the Corporation, it can support an effective Research and Development department, which guarantees its position as the lead innovator of user-based products (Menzel, 2013). According to Menzel (2013), the nature of the technology market, which is dynamic and rapidly changing, gives a gap for new products.

For the past few years, there has been competition for lead innovators in the technology industry. However, due to the reliability of the Apple Inc. majority of its customers who are the upper and middle class earners have a higher consumer loyalty than the competitors customers. As explained by Brait (2004) the innovating company attempts to minimize the transition costs to increase the revenue. Therefore, Apple Inc. should rely on its effective research and design (R&D) to maintain its lead-innovation position, especially in the western markets. The R&D includes market data, technology products, competitors, and general external parameters that affect the technology industry.

Similarly, Apple Inc. could exploit lead innovation through partnership and collaboration with new entrants. Due to the companys size, it enjoys social legitimacy and a huge market share. However, due to the volatility of the technology products, there are independent producers with better information that could aid in the development of the current products. Menzel (2013) identifies that unlike other industrial markets, technology has a stable and existing market. Therefore, if Apple focuses on the production of better and technologically improved products, they will maintain a huge share of the current market. Moreover, through partnership, Apple could use its R&D to assess the market response thus cutting on dead-stock losses.

The current dynamics of the technology markets favors the major developers. Due to the huge number of entrants, the consumer loyalty to new brands has considerably decreased due to the low utility from some of the products. Therefore, Apple Inc. should maintain its position by exploiting the lead innovation techniques, which include collaboration, poaching, R&D, and information-based production. The approach will also reduce the cost of innovation as opposed to extreme approaches such as disruptive innovation.

Reference List

Baregheh, A., Rowley, J., and Sambrook, S. (2009) Towards a multidisciplinary definition of innovation. Management Decision, 47(8), pp.1323-1339.

Brait, R.A., 2004. Lead users as a source of innovation. International Journal of Law and Information Technology. 2(2) pp. 168-177, [Online].

Menzel, A., 2013. How well placed Apple is to sustain its recent success in the Consumer

Electronics Industry.

Varis, M. and Littunen, H., 2010. Types of innovation, sources of information and performance in entrepreneurial SMEs. European Journal of Innovation Management, 13(2), pp.128-154.

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