Report of Influence Leadership on Apple Inc

Report of influence leadership on Apple Inc | May 5 2011 | This report shows market review, SWOT and PEST of Apple Inc as well as back ground of Steve Jobs- brilliant CEO. It also criticize and relate to leadership theories in his case. | | Contents Introductions3 Findings4 1. Products and services4 2. Market review5 Literature review10 Conclusions15 Recommendations15 References16 Introductions It is obvious to suggest that the success of  a  corporate brand  is based on  many factors  that  impact directly  or indirectly to  delivering the  decision  to build  that success. Human factors, especially  the role of leaderships and  their decision  are  prerequisite  to bring ‘a unique success’  in both  business and  brand reputation. According to Fortune magazine, Apple Inc is â€Å"The Most Admired Company† in the USA in 2010 and becomes a leader in technical rivalry in majority areas such as consumer electronics as well as software products [ (Magazine, 2011) ]. Its success based on creativity and innovation strategies, and a significant advantages which allows the company to occupy the leading positions in the world market is leadership of this Company , specially Steve Jobs- a visionary talents CEO. He has played an important role in the development of the computer company. However, this was also the problem of Apple because of lack of Steve Jobs such as when he got cancer leading to falling down Apple' stock price in the past. So that, The aim of this report will focus on affection of leadership on Apple and how leadership theories relate in this case. This report also shows market review of Apple Inc and recommends for this company . The report based on secondary research (public information on the internet, journals and literature review from books). Laterally, the research will evaluate the fact and key theories in specific circumstance- Apple Inc and Steve Jobs. Findings 1. Products and services In 1976, Apple was co-founded by Steve Jobs and Steve Wozniak. The Company specializes designs, manufactures, and markets consumer electronics products – personal computers, portable music players, mobile phones – as well as related software, services, and peripherals. Apple sells its products worldwide and provides support through its website . Additionally, Apple distributes digital entertainment content through its iTunes Store. While initially offering only music, the store has grown to include videos, television shows, films, and audio books. Apple's products and services include: * A range of personal computing products including desktop and portable computers. The Company’s desktop computers such as iMac ®, Mac ® Pro and Mac ® mini. Its portable computers include MacBook ®, MacBook ® Pro and MacBook Air ®. * iPod: The iPod was launched as a line of portable digital music players in 2001, a portable entertainment device capable of storing photos and playing video. iPhone: Released in June 2007, the iPhone marked Apple's entry into the rapidly growing Smartphone market. * In January 2010, introduced iPad, a multi-purpose mobile device for browsing the web, reading and sending email, viewing photos, watching videos†¦ etc * iTunes Store: in early 2001, iTunes is a digital media player application used to manage audio and video files. * Apple TV: Launched in 2007, the Apple TV is a dig ital media receiver designed to play content from an Internet media service or any computer running iTunes. AppleCare ® provides a range of support options for the Company’s customers, include assistance that is built into software products, printed and electronic product manuals, online support including comprehensive product information as well as technical aid, and the Apple Care Protection Plan (â€Å"APP†). * The Company offers a range of software products for consumers and creative customers, including the Company’s proprietary Mac OS X and iOS operating system software. Ipad2 Imac Iphone4 Macbook Pro 2. Market review The Company manages its business primarily on a geographic basis. Operating segments consist of the Americas, Europe, Japan, Asia-Pacific. In September 25, 2010, the Company had opened a total of 317 retail stores, including 233 stores in the U. S. A and 84 stores all over the world, approximately 44% of the Company’s total net sales in 2010 inside the USA. Also, the Company had nearly 46,600 full-time equivalent employees and 2,800 full-time equivalent temporary employees and contractors. It has worldwide annual net sales of $65. 225 billion in 2010. (Inc, 2011) Net sales and Gross margin of Apple Inc in 2008-2009-2010 ($ million) Net sales/ Revenue : during 2010 increased $22. 3 billion, or 52% compared with 2009. Overall, total net sales of Apple increases rapidly, specially in 2010. (Inc, 2011) Expenditure: $1. 8 billion, $1. 3 billion and $1. 1 billion in 2010, 2009 and 2008 to invest development of new innovative products, such as iPhone, iPod, iPad and Macbook. (Inc, 2011) Investment of Apple in 2008-2009-2010( percentage %) * PEST Analysis * Politics Different countries have different policies which some way restrict or give the company chances. The company has to act in accordance with the environment regulations such as environment safe disposal or recycling. Triad , NAFTA and other regions open doors to trade ,otherwise Latin America, Asia offer massive potential. Unstable politics caused terrorism activities are directly impacting the overall business of the company. * Social The growing of computer and internet usage all over the world which are opportunities to develop computer industry. Education issue is put first for new generation which is key element for business of the company. User becomes more knowledgeable and skilled about computer. Economic Impacting from economic crisis leading to low consumers spending, however some signs of improvement appears by increasing of spending and investment of consumers. Currency exchange rate fluctuations and international trade regulations (tariffs and antidumping penalties) may affect products sales. * Technology Advanced in technology quickly and consumers appreciate more ; more advances in their systems. The traditional desktop might become outdated by the entrance of new revolutionary products. Increasing demands for new technology in schools and professionals. * SWOT Analysis * Competitors SWOT and PEST analysis above showed overview criticism about Apple. The company has a good performance, however it also encounters aggressive competitors in all segments of its business. The markets for the Company’s products and services are highly competitive. Because the segments in which the Company competes are characterized by rapid technological advances, including personal computers with its Mac computers; mobile communications and media devices with its iPhone, iPad and iPod product families, and distribution of third-party digital content and applications with its online iTunes Store. For instance : * Personal computers segment: According to Fortune magazine, HP is ranked 2nd in list of World's most admired companies with score 7. 74 , HP's revenue is $126 billion in 2010. (Magazine, 2011) (HP, 2011) * Mobile communications segment: HTC- The world's largest maker of handset using Microsoft Corp. and Google Inc. operating systems. Its products use Google’s Android platform and   Windows Phone 7 software of  Microsoft. Revenue rose to NT$76 billion in third quarter 2010. Businessweek, 2011) * Software segment: Android, the free operating system developed by Google, accounted for a 32 percent share of the U. S. market for Smartphone bought in the past six months of 2010 according to August data from Nielsen Co. * Current and future trends Using Smartphone is increasing today( increased to 29 % in 2010, USA) (Roger Entner, 2011). A growing proportion of younger consumers opt to use their mobile contracts for all telecoms services. The focus of mobile indust ry will be on † platforms†, include operating systems ( iOS of Apple , Android of Google, and Microsoft's Window 7) . The combination of affordable data plan and increasing Smartphone usage would get more people online. Consumers are ready to spend more for their extra functionality, effective and fashionable products. Touch, eye, voice and possibly even brain controllers will be commonplace. It also is future trend for personal computers and portable music players. Literature review As mentioned above , Apple's success base on key point Steve Job- a brilliant CEO. Before analyzing influence of Steve Jobs on Apple and relate it with leadership theories, it is necessary to define leadership and its theories. Definition : Leadership is an interaction between two or members of a group that often involves structuring of the situation and the perceptions, expectation of members. Leaders are agent of change-person whose acts affect other people more than other people's act affect them. Leadership occurs when one group member modifies the motivation or competencies of others in the group. In fact, some peo ple are able to lead naturally while others, leadership skills are built up through hard work and practice. According to Stogdill's studies, there are 5 elements which modify effective leader traits : Capacity, Achievement, Responsibility, Participation, Status. (Bloisi et al. , 2007) In addition, 4 leader decision styles were classified include : Autocratic, Democratic, Laissez-faire, Human relation. (Bloisi et al. , 2007) Although, leader's success also depends on how they interact with various circumstances that influence the tasks to be undertaken. A range of researches was pointed out, however some popular theories have known( contingency theories). Firstly, The Fiedler contingency model-matching leader style and situational favorableness factors. It includes (Bloisi et al. , 2007) Task structure – the degree to which the duty are formalised and planned; Position power – the degree of influence a leader has over activities such as recruitment, authority, promotion and increasing salary; Leader-member relations – the degree of confidence, trust and respect inferiors have for the leader . Secondly, Hersey and Blanchard's (1996) situational leadership theory – matching leader behaviours to followers' needs. Based on combinations of the leader's task and relationship behaviours as moderated by the job maturity of followers. (Bloisi et al. , 2007). It includes: Task behaviours – organising and defining roles, structure, channel of communication; Relationship behaviours – relationship with inferiors by opening channel of communication and supporting. Thirdly, Path-goal theory ( House and Mitchell, 1974) : a leader should clarify goals, show acceptable paths for attaining goals, make the path easier to travel, and reward satisfactory performance. (Bloisi et al. , 2007). It includes: Directive leadership (highly task orientated)- provide guidance and how indentified performance standards and time schedules as well as policies; Achievement-orientated leadership (high task and relationship orientated) – challenge purpose is built up, seeks performance upgrading ; Participative leadership ( moderately task and highly relationship orientated ) – consulting with and soliciting the ideas of others in decision-making; Supportive leadership (highly relationship orientated) -concern for the needs and purposes of others and strives to make the work conditions satisfying and equitable. Additionally, there are 2 styles among several leadership styles which modify model of leaders. Firstly, Transactional leadership – using bureaucratic authority and incentives to motivate, focusing on rewards according to Bass theory. Secondly, Charismatic leadership – † heroic † leadership ; the ability to energize interiors through the use of symbols, visionary, stories and rhetoric to achieve at extraordinary levels, typically having a vision and a reason for the future , advanced by Weber (1947). Such information have demonstrated some traits and processes of leadership in an organisation. In fact , they are also traits which fit in Apple case. Its success story began in 1976, when Steve Jobs and Steve Wozniaks launched their own business, the Apple Computer Company, in Jobs' family garage. At that time, he was 21, then by the age of 25 , Jobs obsessed $165 million . The increase of Apple's success quickly which put the first landmark in his line of business. (Campbell, 2011) In 1985, he got out of the way of Apple when John Sculley , who came from Pepsi-Cola, had joined. Four years later, Jobs came back with another company, NextStep which achieved far away from the success of Apple but it recalled people that he would continued in his way. Later, he secondly started with his participation in Pixar- the animation company he purchased from the Star Wars director, George Lucas. The first success of Pixar is movie Toy Story which lead to its position as one of the key player in Hollywood, then launching movie Finding Nemo. Its success made Jobs a billionaire and prepared for his coming back Apple in 1997. Within one year , the ailing company was once more making huge profits. However, his journey didn't stop at that point. Since the combination of high-speed Internet and the music industry has opened a new segment for getting profit by downloading music . Jobs believe that iTunes is the answer. Additionally, Ipad2 is leader in digital book and tablet segment now. (Campbell, 2011) Steve Jobs is really an effective leader, an important person in development of Apple. In many way , his traits fit in charismatic leadership. Firstly, an ideology is showed clearly, often using labels and slogans, He offered a vivid and positive image of the future. For instance, he used the slogan as well as the iconic logo of the Mac team:† Pirates! Not the Navy â€Å"to build up Mac team( a group specializes design new products) (Elliot, Jay; L. Simon,William, 2011, p. 38). Being pirate, employees should think differently and act as revolution. His goal and passion are perfect products. He concerned about every details of products carefully until it was launched. This is an ideological image which he and his team follow, becomes a motivation in the whole company. By articulating an ideological vision and recruiting a number of talents who share the values of the vision, he develops the company. Secondly, he showed clear structure to reach his goal as well as increases positive values and suggest linkages between expected behaviors from interiors with his vision of the future. For example, he formed the Mac group would never raise more than a hundred people because it was easy to fall into the danger of free flowing of ideas, barriers of communication among employees. He had a plan to guarantee everyone has the same wavelength and the same direction, setting a standard of doing each task for each staff (Elliot, Jay; L. Simon,William, 2011, p. 38). He ordered the team to create a whole new prototype of the computer using different chip, the Motorola 68000, which featured a lager memory. Another case, he forced people do his direction by calling meetings, setting new paths, adding new people into Mac team to move the cursor with some kind of control device . It led to moving the cursors with the mouse , clicking o make collection, dragging a file or icon (Elliot, Jay; L. Simon,William, 2011, p. 15). That was the fundamentals of the way we use computers today. Also, he was always finding for something specific from each group to link the quality he wanted. He brought out the creative talent in several people and guided them to work in harmony as well as encouraged open discussion. These characters also fit with Task behaviors of Hersey and Blanchard theory and Task structure of Fielder theory. Because both theories are quite similar , they show clear structure and aim to lead employees follow. H In fact, effective leader does not rely on one leadership style to manage company. Transaction leadership style also contain in this case. He has focused on achieving the tasks at hand. Jobs has got things done by making, and fulfilling, promises of recognition, and advancement for employees who have performed well. By contrast, employees who do not do good work are penalized. This promise and reward for good performance, or threat and discipline for poor performance. For example, he set up product retreats into the actual work agenda, opening them every three months for the whole growing Mac team. Every member was expected to be present. One by one, each team manager for hard ware, soft ware, marketing, sales, finance, PR would present a brief status report and time line , explaining where they were in term of agenda. If their team was falling behind , they would be criticized and given some suggestions for how they could overcome (Elliot, Jay; L. Simon,William, 2011, p. 43). Everybody was free to give suggestions. Besides, he decided that the signatures of the engineering team members would be put on the inside of the case of the first Mac. It's also a gift or recognition from him to interiors. Another case, achievement- oriented leadership consist with his traits, he was always discovering imperfections in everything , from the design to the marketing and packaging , to how the product would be promoted and sold. He always asked: † At the first grade level† (Elliot, Jay; L. Simon,William, 2011, p. 21) . In a story, he had decided early on that the cell phone being developed at Apple would have only a single button but his engineers couldn't carry out , then, he kept demanding in effect : † The phone will have a single button. Figure it out† (Elliot, Jay; L. Simon,William, 2011, p. 23). By high demanding, we have iPhone 4 with only a single button today. In addition, he is autocratic decision style because he always gave duty for others and decided quickly. However, he is a relation behaviors and supportive leader. He focused on the slogan: † We are all in this together† by bringing people from different aspects to meet each others in celebrations and to make a satisfaction work place such as allowing to work free of usual restrictions (Elliot, Jay; L. Simon,William, 2011, p. 40). Apple would become known as a company that celebrated just about everything: meeting goal, sales growth, new product introduction, new key people. In 1981, Bandley Drive building , a part of the center was a large atrium (Elliot, Jay; L. Simon,William, 2011, p. 50). It had a piano, video games huge fridge stocked with bottles of fruit juice . It was quickly became a place for the employees to meet and hang out. Finally, his case consist with leader member relations theory. Because of all of his passion and actions , followers have a strong respect and trust to him. Talents would be attracted by talents, that is explanation for Why Apple attracted many genius engineers and developed nowadays. At last but not least, that is the innovation of Steve Jobs in the whole business context. Technologies which he developed and advanced in NextStep and Pixar were applied on Apple Inc. That is really a basic for Apple's success . He always plays an important role in making right decision as the statement about leader and manager : Leader do the right thing , manager do the thing right. (Bloisi et al. , 2007) Conclusions Steve Jobs is criticized as an effective leader in the world. His famous and the well known of Apple remain together and will keep an important position in world trade. He is a part of success of Apple Inc and a leader in significant decision of development of his company. Understanding Apple Inc case and its market as well as an important leader- Steve Jobs will make us be aware of some traits of leadership in many theories deeply. His leadership style are : Task behaviors of Hersey and Blanchard theory and Task structure of Fielder theory, Charismatic leadership and Transaction leadership as well as Relation behaviors and Supportive leader. So that, it is realization that an successful leader always exists different leadership styles. Leaders always change their leadership style flexibility which is suitable for each task and each circumstance. Recommendations A part of the success of Apple based on Steve Jobs but it is dangerous if lack of this key leader. Besides, Job also shows that he is impatient person. So, it is considered seriously that Apple should give structure and motivation for employees as well as the whole company clearly and make it become tradition. Also, it is necessary to improve workplace such as improving workplace conditions in China and invest more in charity segment as Microsoft. It is useful to promote Apple's image. References Bloisi, W. , W. Cook, C. ; L. Hunsaker, P. , 2007. 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