Classic case study: How Apple become the world largest tech company? (2)

    

New Business Model Innovation (iTunes Store, App Store.)

Apple not only do the great innovation for their product but also for their business model. The business model innovation means innovator can figure out the new way to create, distribute, and market this idea. Henry Ford did not invent the car, but he found the new way to distribute mass production. Apple and Steve Jobs gain so much great reputation not only because their innovative product but the reinvented way to change industry. This is why FORTUNE magazine choose Steve Jobs as “CEO of The Decade” on Nov. 30, 2009 edition, they admire him in the past ten years he radically changed three markets - music, movie, and mobile industry. For entrepreneurs, if they can create or change one industry already done the remarkable job, but three is never heard-of.

For example the iTunes Music Store opened on April 28, 2003. Before this there is no one in music industry can figure out how to deal with the illegal MP3 download problem, and Steve Jobs persuaded the five major music labels (EMI, BMG, SONY, UNIVERSAL, WARNER) to try selling songs for $0.99 each, in 2003 the Apple Music Event Steve Jobs described that the user want to own the music, because good music they will listen a hundred times maybe, and you just simple click the button ”BUY SONG” and iTunes do the rest for you, and Steve Jobs said illegal download have so many bad things, including no previews, stealing, bad karma etc. iPod+ iTunes+ iTunes Music Store are perfect ecosystem. Hardware, software, and content combine together to make golden triangle for Apple. According to the Apple press release in April 3, 2008. Apple surpassed Wal-Mart to become the number one music retailer in the US, based on the data from the NPD Group‘s MusicWatch survey. It just takes only five years Apple dominate music industry.

Retail Store Innovation (Apple Store.)

The other great example of Apple’s philosophy about innovation is their retail store strategy, since Apple open the first store in May 2001, it become the fastest growing in retail history, according to Apple fiscal 2010 fourth quarter report, they have 317 stores and their store’s quarter revenue was 3.57 billion, it is very impressive achievement, because when they opened the first Apple store, the critics believed they just wasted money, because other company like Gateway just closed their retail store. But Apple is always different than other competitor, they want reinforce the user experience, how they do that? When you walk into the Apple store, there is no name on the outside, only the big, bright Apple logo on there. And you can notice that they all build by glass, metal, and polished plastic, and this decoration all match Apple’s products. It always has newest computers, i-gadgets on the table, you feel no pressure to try anything you want, and if you have any problem you can go to the genius bar to ask, and those employees are always kind and try to solve your problem, so from the design, layout and material, everything you can see that Apple have set up a new standard of how to build a great retail store.

According to the interview by tech blog “The Cult of Mac” editor Leander Kahney on Oct. 14, 2010, the former CEO of Apple John Sculley said “Apple store has the highest revenue per square foot of any store in the world but it’s not just the revenue, it’s the experience. Apple store are packed. You can go to the Sony center, there’s nobody there, you can go to the Nokia store, they have one in New York on 57^th street. There’s nobody there.” Finally we think Apple store demonstrate their way how to focus on the whole user experience, not just about the product or some marketing stuff, they always have complete strategy about process R&D, completely vertical integration, and differentiation.