CHAPTER 1 ORGANISATION PROFILE 1.1: History Founders Steve Jobs and Steve Wozniak created Apple Computer on April 1 1976,and incorporated the company on January 3, 1977, in Cupertino, California.For more than three decades, Apple Computer was predominantly a manufacturer of personal computers, including the Apple II, Macintosh, and Power Mac lines, but it faced rocky sales and low market share during the 1990s. Jobs, who had been ousted from the company in 1985, returned to Apple in 1996 after his company NeXT was bought by Apple. The following year he became the company's interim CEO, which later became permanent Jobs subsequently instilled a new corporate philosophy of recognizable products and simple design, starting with the original iMac in 1998.With the introduction of the successful iPod music player in 2001 and iTunes Music Store in 2003, Apple established itself as a leader in the consumer electronics and media sales industries, leading it to drop "Computer" from the company's name in 2007. The company is now also known for its iOS range of smart phone, media player, and tablet computer products that began with the iPhone, followed by the iPod Touch and then iPad. 1.2: Geographical region and country Apple inc was established in Cupertino, California,United States of America. Apple Inc largest geographic markets are United States of America, Europe, China, Japan, and Asia Pasific(NASDAQ;APPL). Figure 1: The percentage of Apple Inc Total Net Sales by NASDAQ for the year 2014 1.3: Type of organization 1 Apple Inc., formerly Apple Computer, Inc., is a multinational corporation that creates consumer electronics, personal computers, servers, and computer software, and is a digital distributor of media content. The company also has a chain of retail stores known as Apple Stores. Apple's core product lines are the iPhone smart phone, iPad tablet computer, iPod portable media players, and Macintosh computer line. 1.4: Business Process - In the business process management world(BPM), there is not much said about Apple Inc, and people do not associate Apple Inc with BPM. Some say the association is more like Apple with Innovation instead of BPM. There is a bit of method to Apple’s innovation madness and the business process of Apple Inc can be better understand through its value chain activities as the value chain analysis highlights important tasks or activities that provide Apple Inc competitive advantages that rivals its competitors. Inbound Logistic: Apple Inc has secured hundreds of suppliers worldwide and maintain good supply chain management. Apple’s usually will purchase its material that will cover up to the periods of 150 days. In this process, its CEO Tim Cook is known for his specialty of getting suppliers to compete with each other to secure a contract with Apple Inc, which benefits the company. Operations: The company operations are divided into several segments such as United States of America, Europe, China, Japan, rest of Asian Pasific countries, and other retails company. Their operations are helped by 92,600 full-time employees and around 4,400 full-time equivalent temporary employees and contractors. Majority of Apple’s hardware products are assembled by outsourcing partners primarily located in Asia which is to cut labour costs. Outbound logistics. Apple’s net sales through its direct and indirect distribution channels accounted for 28% and 72% of total net sales respectively. Apple strives to minimize the volume of its inventory due to cost considerations. Marketing and sales: Apple Inc distribute its products into the markets through several channels. Every year, the company spends billions of dolars on utilization of marketing communication mix that focus on integration of advertising, public relations, events and experiences or direct selling. Service: Apple Inc is well known of its exceptional quality of customers support and services during all three stages: pre-purchase, during the purchase and post-purchase. The company established Apple experience centers in major cities around the globe where customers can try its products to become convinced about the quality. Apple sales workers also are usually wel- trained and polite young males and females who are technically experienced to demonstrate product features and capabilities. Post-purchase customer service is also impressive with unique iPhone trade-in programs that allow iPhone users to upgrade their phone to newer models with additional payment. 2 1.5 Website address and homepage image - http://www.apple.com/ Figure 2: Homepage of the Apple Inc Website. CHAPTER 2 DESCRIPTION OF IS STRATEGY TRIANGLE OF APPLE INC. 3 After Jobs resigned as CEO and became chairman of the board, Cook was named the new Chief Executive Officer of Apple Inc. on August 24, 2011. Thus bringing major changes in the successful company. Both CEOs has different management style and philosophy thus, affecting the balance of the IS Strategy Triangle of Apple Inc. Major comparison between the old and new IS Strategy triangle are shown in diagrams below followed with explainations. Business Strategy Focused on innovation Organizational Strategy IS Strategy “Dictatorship” style and IT investment to complicated work support innovation- madness Diagram 2.1 OldBusiness IS Strategy Strategy Triangle(Steve Job as CEO, 1997-2011). Organizational Strategy IS Strategy 4 Focus on improvement of products Decentralization of decision making and Effective and efficient improved work investment in IT within Diagram 2.2 New IS Strategy Triangle(Tim Cook as CEO, 2011-2016) Business Strategy Under Jobs' leadership, Apple kicked into high gear in terms of the products it released to the public. Jobs oversaw the introduction of the iMac, the iPod, iTunes, the iPhone, the App store and the iPad. This suite of products still makes up the core business of Apple. Cook, however, has only overseen the introduction of the iPad mini, the iPad retina and the Apple Watch in his three years as CEO. However, Jobs was the CEO of Apple for a much longer term than Cook's current tenure, so he had more time to implement new products. Cook's focus on Apple's core business and his decision to pump the brakes on new products is typical of his style and ideology. While Jobs was looking to constantly innovate, Cook seeks to focus on products that are already doing very well. For example, the Apple Watch is an expansion of the iPhone, rather than an entirely new and innovative product. Dr. Panos Mourdoukoutas also asserts that, “Under Tim Cook, Apple has been churning out new versions of old products that are destined to reach their limits. Tim Cook’s Apple has not yet launch a new product that may replace the iPhone, the iPad and the MacBook. The business model of Apple has shifted from the Steve Jobs to the Tim Cook era,Steve Jobs emphasized the construction of brand new 5 innovative technologies whereas Tim Cook has only been producing slightly improved versions of existent Apple products. For example, instead of having any true innovation with the newly released iPhone 5, Cook focused on tightening up many aspects of the existing smartphone model such as the iPhone 4, he increased its size, allowing it to compete with other larger phones such as those created by rival Samsung and cut Apple’s contract with Google for its Maps service and replaced it with a proprietary map system this let Apple inc to rely less on Google and shore up its own service platform, which will pay off in the future. However, this does not conclude that under Tim Cook’s management the company is failing. Contradictory to the pessismistic view of the new CEO, the stock price for Apple Inc increase drastically. Diagram 2.3 Difference in Apple Inc Stock values Organizational Strategy Apple’s organizational structure is one of the factors contributing to the company’s successful innovation. The success of the company is linked to innovation and the leadership of Steve Jobs, but its organizational structure is partly responsible for ensuring support for such leadership. Now, under 6 Tim Cook’s leadership, Apple has made some small changes in its organizational structure to suit market and industry demands. Most significant characteristics of Apple’s organizational structure: 1. Spoke-and-wheel hierarchy 2. Function-based grouping 3. Product-based grouping Spoke-and-Wheel Hierarchy. A bird’s-eye view of Apple’s organizational structure shows considerable hierarchy. In the past, everything went through Steve Jobs’ office. Jobs made all the major decisions. However, under Tim Cook’s leadership, this hierarchy in Apple’s organizational structure has slightly changed. There is now more collaboration among different parts of the company, such as software teams and hardware teams. Apple’s vice presidents have more autonomy, which was almost absent under Jobs. Thus, the company’s organizational structure is now less stiff, but still has a spoke-and-wheel hierarchy where Tim Cook is at the center. Function-Based Grouping. The upper tier of Apple’s organizational structure has function-based grouping, which an element is derived from the functional type of organizational structure. Each senior vice president who reports to Tim Cook handles a business function. For example, Apple has an SVP for industrial design, an SVP for marketing, and another SVP for retail. In this aspect of the organizational structure, Apple’s top leaders address business needs in terms of function areas. Product-Based Grouping. The lower tier of Apple’s organizational structure has product-based grouping, which an element is derived from the divisional type of organizational structure. Below the senior vice presidents, there are many vice presidents for different outputs or products. For example, Apple has a VP for iOS apps, a VP for iPad, and another VP for consumer apps.