Apple Disruptive Innovation free essay sample

The next products and services to be leased by the company did not only save the business but also [Dyer, Greenest Christensen, 2011]made a substantial impact in the global music industry which at the time was plagued with piracy. The digital hub strategy was an encompassing innovative strategy developed by Apple that rejuvenated the personal computer market, disrupted digital publishing and the music industry. The digital hub strategy took advantage that its discovery driven manager understood the capabilities of Apple has a business.The capabilities of the business was based on three main factors which are, its resources, its processes and its values. When these factors are meshed together with the DNA, vision and creativity of its leader, a resulting disruptive innovation was developed in the technology industry as a whole [Christensen,1997]. The tangible resources at Apple at the time the innovative digital hub strategy was developed consists of some discovery-driven people who were part of the initial team Apple started out with on the Apple l. We will write a custom essay sample on Apple Disruptive Innovation or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page These people have over the years been involved with experimenting and launching of innovative products during the early days of Apple as a company. Another tangible resources also available was he technologies Apple had. It was believed that Apple was the only company which owned the whole widget the hardware, the software and the operating system [Caisson, 2012] and could deliver an end to end solution, thereby controlling the user experience from all front. To create this digital hub, Apple had to depend mostly on the capabilities of the mimic, firework, the Macintosh and the ability of its software and hardware engineers to produce simple intuitive programs and products respectively. To elaborate further on the latter, Apple with its processes formal and informal always ensures across all teams communication, interaction and strong collaboration between its software and hardware engineers to transform resources into products and services[Christensen,1997]. The first foray into the digital market was with video.Apple realized that by creating a program that allows a user to not only record videos but can allow for personalization and recreation of a recorded video. According to Steve Jobs, this makes your camcorder ten times more valuable [Caisson, 2012]. This lead to the production of software applications or editing and which also allows the user burn digital videos to a DVD drive; movie, DVD. Similarly, technology of a consumer dri ve that could burn a DVD which Apple was the first to ship [Caisson, 2012]. The main drive for this complete innovation in the digital video market was to make the portable device easy to use by removing complicated functionalities manufacturers had cramped into these devices. The same strategy Nas used in digital photography. The mimic became the hub for portable cameras and software application; photo for editing pictures. However, there was an already existing competitor in this market, but because of the success of DVD and movie in digital video, creative people were more inclined to try out software applications developed by Apple for digital photography as well.As was mentioned above, the idea of a digital hub strategy embodied all classes of innovation incremental, radical, sustaining and disruptive. At this point where there was impact in the digital died and photography market, Apple was both incrementally and radically innovating in terms of technology focus but in a sustaining way to acquire more market share to remain in the technology market. The disruptive moment came for the company when it ventured into using the same strategy in the digital music market. The foray into the digital music was in similar fashion as into other digital markets.Learning from its mistake of not producing computers that had the ability to burn CDC, Apple developed software applications that made portable music devices ten times more valuable, Greenland for creating and mixing music; tunes for competition in this market, Apple was able to make an impact in the music revolution that was going on at the time by making tunes really simple and removing lots of extraction other music managing software had at the time. This in itself didnt disrupt the market but what came next did. In the same year, the company introduced its own portable media player the pod.The pod at the time of release questioned all the status quo concerning music and technology. It was the only media player that could hold up to a thousand songs and could fit into a pocket ultramontane. To realism this ultra portability, a lot of creative effort was put into the technology of hard drive th at was thin and small enough. Once this technology was achieved, combined with Apples own technology of firework fast transfer, it was easy enough to disrupt the music player market by producing a device that embodied the values of Apple in simplicity in marrying art, design and technology.Ninth complete integration with its own music management software, the device was simple and intuitive enough, because most functionalists where put in tunes that made the pod ten times more valuable. Cannibal Illumined Syllabi 1263626 sides owning the hardware that delivered great music experience and the software that managed music in the most intuitive and simple way, Apples aim to liver the best experience with music wasnt complete as there was no control of Inhere users acquired their music from.Moreover, at the time the music industry was trying so hard to resolve the issue of privacy. Apple realized early that one of the important use of the internet was for music delivery as it gives users near instant preview and mo st of all allowed for unauthorized usage of music. To solve the latter Nas the main need for the music industry. Apple was able to deliver a solution with the tunes store, which managed the technologies available the internet and a huge USIA database to provide a legal way for users to acquire music. The most part was getting the main players in the music industry to realism that Apple was the only company that could solve the problem as they had the hardware, software and could create a service that uses these resources. The role of Steve Jobs as the head of Apple was important in creating this service as he understood the great divide between the art industry as a whole and the technology industry [Caisson, 2012]. Ere creative people lacked how to maximize technology to their advantage which he noticed during his time at Paxar.Likewise, the technology industry had major shortfalls in creative designs when it came to their products. He leveraged on his capabilities to relate with suppliers, distributors and customers of the music Industry. With over 200,000 music available at launch, unbinding purchase of singles from an album and close integration with tunes which eliminates poor management of music files, the tunes Store, tunes and the pod disrupted the hole music and technolo gy industry.Finally, it can be said that the whole digital hub strategy could only have been delivered by Apple which understood its abilities of having resources like Steve Jobs a discovery driven manager and other people like him, a brand, different technologies and expertise which have been developed over time, processes that ensure close collaboration between teams to transform resources into products and service and values that reflect simplicity by blurring the line between art, design and technology. This strategy would begin the transformation of Apple from being a computer maker into being the worlds most liable company. [locations, 2012] NH It is Disruptive Disruptive innovation transforms a product or service that was expensive and implicated that only a few people with a lot of money and skills had access to.Disruptive innovation makes it so much more affordable and accessible to a much larger population Christensen Clayton [Christensen,1997] Apple went through the different forms of innovation incremental sustaining innovation, radical sustaining innovation, incremental disruptive innovation and radical disruptive innovation before succeeding in being disruptive. One of the transformation understood, was to change the market context it operated in. Before the digital hub strategy, Apple was leveled to be in the personal computer (PC) market.The PC market was in a decline and it was used mostly for professional use. Software applications were developed to improve producti vity in the business context. Figure 1: Business Model Personal Computers User 70% Business Professionals 30% Everyday Creative Individuals Value Capture Value Creation Improved Productivity Value Prop MIDGET Personal Computers Ere digital hub strategy disrupted the PC market in the sense that it made the capabilities of the PC more accessible to a larger population which was everyday retrieve users.Using the same model as seen in Fig. In which the real value creation Nas improved productivity but for creative and art contents like video, photography and music. Despite the fact that manufactures of portable devices that delivered alee creation for creative and art contents tried so hard to cramp more functionalities to improve productivity relating to creating, editing and sharing these content, they got to a point of producing products that became complicated and difficult to use. Figure 2: Business Model Video Recorders User User Record VideoRecord Video, Personalize, Share MIDGET camcorder Oldie Recorder E re first innovation came from Apple solving this complex model by transferring some of the value creation of the portable devices (e. G video recorder) to the personal computer which was better at handling this functionalities due to its capabilities, for example the PC had a larger screen size. Incremental innovation was also carried out on the personal computer to carry out these functionalities faster. Example is the development of the DVD burn drive that allowed for easy creation and sharing of contents.

Operations Decisions for Krafts Foods Inc. and Manute Foods Company

Operations Decisions for Krafts Foods Inc. and Manute Foods Company Companies’ Background The two companies referred to in this study operate in the foods and beverages industry. In addition, the companies concentrate in the production of low calorie microwavable foods.Advertising We will write a custom essay sample on Operations Decisions for Krafts Foods Inc. and Manute Foods Company specifically for you for only $16.05 $11/page Learn More Krafts Foods Inc. is a leading global manufacturer and marketer of beverages and packaged foods (MarketResearch.com, 2011). It has its headquarters in Northfield, Illinois, but also operates in the other continents. Low calorie microwavable products from the company fall under the convenient meals sector. For instance, cheese and Kraft Macaroni come in ready-to-heat pouches. Manute Foods Company is also a multinational foods company. It specializes in the manufacture and distribution of low calorie microwavable foods. Its operations are not as widespread as those of Krafts Foods I nc. However, its presence in the industry is significant. The organization operates from the state of Texas. Low Calories Microwavable Foods Market Structure and Companies Effectiveness Determination Plan Mankiw (2011) regards market structure as the number and types of competing firms operating in a given industry. Consumers across the US and the rest of the world are exhibiting increased preference for healthy and fat-free food products (MarketResearch.com, 2011). According to IMAP (2010), the global demand for convenience foods and increasing health consciousness are expected to facilitate continued growth in the low calorie microwavable foods sector. In addition, majority of the processed foods consumed in the world are packaged. Competition in the low-calories microwavable foods industry is intense. Krafts Foods Inc. competes with other global foods and beverages brands, not only in the low calorie microwavable foods sector. Some of the competitors include Tyson Foods (US), Dan one (France), and JBS (Brazil). Others are Kellog Co. (US), ConAgra Foods (US), and HJ Heinz Co. (US) (IMAP, 2010; Rayburn, 2014; Jambrak, 2012). In spite of the stiff competition, profits in this sector are relatively high. For instance, Krafts Foods Inc. recorded $42.2 billion in revenues in 2008 from its global operations. Operating profits and net income stood at $4.9 billion and $2.9 billion respectively (IMAP, 2010).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Krafts Foods Inc. market analysis above reveals that the low calories microwavable foods industry has a monopolistic competition market structure. The market is highly competitive, characterized by numerous operators (Yorke, 1984). The companies in this industry usually compete through the distribution of slightly differentiated products, albeit in the same line. Manute Foods Company exhibits these characteristics in line with the reality in the industry. The two companies analyzed in this paper are operating at the product-market competition level. Analyzing market effectiveness should indicate the two organization’s firm and industry performance in terms of profits. The market effectiveness plan should be based on the entities’ operational strategies. Business strategies should exhibit the ‘forward-looking’ ability of the venture in relation to the choices and investments made. In addition, they should anticipate the future actions of the firm and those of the competitors. Both Manute Foods Company and Krafts Foods Inc. should invest in markets that are characterized by viability and stability, as far as anticipated outcomes are concerned. Viability means that companies can make profits from the markets they are venturing. On the other hand, stability implies that entry into a new market will not lead to losses in the near future. Two Factors Likely to Cause Chang e in the Low Calories Microwavable Foods Monopolistic Competition Market Structure There are various factors that may affect the operations of the two companies. One of them includes regulations in relation to licensing and product quality. Strict licensing terms with regards to these products might lock out some companies. Such a scenario may limit the freedom of entry into the market and exit from this industry. In addition, the terms may reduce the number of firms operating in the industry (Yorke, 1984). Reduced competition will translate to higher profits and market share for the existing companies (Arslan Klaus, 1994). The structure of the market may also be altered by the increasing health consciousness among consumers in the food industry. What this means is that demand for these foods may rise, leading to a rise in the number of new entrants. As a result of this condition, competition in the industry will increase. In light of this, the two companies may be eliminated from the market, in addition to experiencing an erosion of their market share. Short-Run and Long-Run Production and Cost Functions and their Applications the Operations of Manute Foods Company Production is characterized by a number of processes. It involves a series of activities aimed at increasing the value and altering the utility of raw materials or inputs (Mankiw, 2011). Production function determines the relationship between the inputs and the products per unit of time (Collier, Sherell, Babakus Horky, 2014). The inputs may lead to massive costs for organizations if not well managed.Advertising We will write a custom essay sample on Operations Decisions for Krafts Foods Inc. and Manute Foods Company specifically for you for only $16.05 $11/page Learn More The production and cost function for Manute Foods Company can be determined symbolically as follows: Q = f(Xa, Xb, Xc,†¦ Xn). Q represents total quantity of products per specified period. It takes into consideration specific combinations of inputs (Mankiw, 2011). Xn represents the quantity of the different types of inputs. Considering the market conditions, the production levels of Manute Foods Company can be determined or forecast using varying combinations of inputs within specified durations of time. Analysis of costs highlights the relationship between cost and production over a specified period. In essence, the cost function provides different results depending on the firm’s application of varying utilization or inputs percentages (Arslan Klaus, 1994). Businesses experience fluctuations in their long-run production costs. One of the main reasons behind these changes is sustained alterations in production levels over time. Whenever Manute Foods Company incurs losses or makes profits, long-run costs change. In the long term, fixed factors of production are non-existent (Mankiw, 2011).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The short run costs of Manute Foods Company, on the other hand, should accumulate throughout the production process in relation to the production function (Mankiw, 2011). However, it is important to note that fixed costs do not affect short-run costs. The only factors that influence production in the short term include revenues and variable costs, a fact applicable to Manute Foods Company. Short-run and long-run costs and production functions are very essential to managers. As already indicated, the low calorie microwavable foods industry is characterized by monopolistic competition. In the short term, such segments lack efficiency. The inefficiencies result from profit maximization and specified production levels in the industry (Collier et al., 2014). Managers at Manute Foods Company should determine industry market trends in advance. By so doing, they can forecast demand and compute the levels of input necessary to ensure that production meets the demand. The developments highlig hted above have various effects on stakeholders. For example, they may lead to a net loss to both consumer and producer surpluses. The managers of Manute Foods Company can maximize short-term profits from the results of the short-run production and cost functions. When the marginal revenues equal marginal costs from the function, the costs incurred can generate profit for the companies (Mankiw, 2011). Long-term cost and production functions can provide the low calorie microwavable foods managers with information necessary to their operations. For example, they can use the information to plan and implement business strategies. In addition, they can effectively plan for the current and the projected market environments. The information will aid them in making the appropriate production decisions. Efficiency in the long-run costs would also be sustained following the production of the desired quantities of products at the lowest possible costs (Mankiw, 2011). Managers can make other de cisions that affect the status of their organizations from the production and cost functions. For example, they can decide to expand or decrease the size of the companies, change production quantities, and exit or penetrate other markets. Such decisions are based on the results obtained from the production and cost functions. Possible Situations for Discontinuing Operations by the Low Calorie Microwavable Foods Company The two foods company can cease their operations following a legal order faulting their criteria of production. The managers can contest the legal order if they believe their operations do not breach any regulations. Alternatively, the companies can opt to rectify their production systems to adhere to the regulations (Mankiw, 2011). The company can also terminate operations if they do not expect to generate profits or revenues from the industry in the near future. Such a scenario can arise from radical changes in consumption trends, rendering their products obsolete. Pricing Policy for Maximizing Profits in the Low Calorie Microwavable Foods Industry Mankiw (2011) defines psychological pricing as an effective marketing strategy. It involves basing the prices of products on such factors as quality, consumer’s value perceptions, and popular price points (Yorke, 1984). In the low calorie foods market, basing prices on consumer’s health value perception will maximize profits in the long term (Girz, Polivy, Herman Lee, 2012). As already indicated, consumer trends in the foods and beverage industry are changing. To this end, most consumers are adopting more health conscious consumption practices. In light of this, the proposed pricing policy will facilitate the development of positive perceptions among consumers as far as the products of the two companies are concerned. Evaluation of Financial Performance for the Low Calorie Microwavable Products Company A company’s financial performance indicates the financial health of the enti re firm. Evaluations of the performance are carried out from time to time (Mankiw, 2011). Organizations can use their financial performance to compare their position in relation to competitors in the industry. Return on equity would be appropriate in determining the performance of both Krafts Foods Inc. and Manute Foods Company (Girz et al., 2012). The measure would indicate both profits and losses made by the companies, as well as the overall efficiency of the production costs. The return on equity metric has significant impacts on both long-term and short-term managerial decisions. The measure would also incorporate returns for all stakeholders. As a result, the managers have to focus on more than just the profits made by the company. Increasing Profitability and Stakeholders Value in the Low Calorie Microwavable Foods Industry Manute Foods Company and Krafts Inc. should exploit the growing demand for healthy and convenient food products. Conducting research on consumer demands an d developing products to meet identified requirements will enhance return on investments. Effective management of production costs and investment in long-term market targets would improve performance in the monopolistic competitive market (Mankiw, 2011). Positive returns mean increased profits for the companies and value addition to stakeholders. Reference Arslan, G., Klaus, B. (1994). Market structure and profitability in the U.S. food manufacturing industries. Atlantic Economic Journal, 22(1), 103. Collier, J., Sherell, D., Babakus, E., Horky, A. (2014). Understanding the differences of public and private self-service technology. Journal of Services Marketing, 28(1), 2-3. Girz, L., Polivy, J., Herman, P., Lee, H. (2012). The effects of calorie information on food selection and intake. International Journal of Obesity, 36(10), 1340-1345. IMAP. (2010). An IMAP consumer staples report: Food and beverage industry global report2010. Web. Jambrak, A. (2012). Application of high power ultrasound and microwave in food processing: Extraction. Journal of Food Processing Technology, 4(113), 1. Mankiw, G. (2011). Principles of economics (6th ed.). New York: Cengage Learning. MarketResearch.com. (2011). Kraft Foods, Inc.: SWOT analysis. Web. Rayburn, W. (2014). Improving service employee affect: The transformative potential of work design. Journal of Services Marketing, 28(1), 4-5. Yorke, D. (1984). Marketing and non-profit-making organizations. European Journal of Marketing, 18(2), 17-22.