Globalisation an Innovation

Summary

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This paper involves two modules: in the first module, scholarly articles and other printed sources will be consulted in order to assess the information advanced. Additionally, the paper will provide a comprehensive evaluation of the case study about Apple Inc. and based on the event in the case, impacts of innovation on the policies of the company will be derived. In order to comprehensively do this, several models of innovation will be used. In the second module, the paper will assess the case study about Air Asia, thereby identify and evaluate new markets. Consequently, this module will assess the various market entry routes and develop an international marketing plan for the company.

Module 1: Globalisation and Innovation

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Literature review on globalisation and innovation

Globalisation is considered as one of the main phenomena to which the contemporary societies are confronted. In addition, the phenomenon, for a long time, has affected all aspects of people’s social life in the entire world. According to Hagel and Brown (2006), globalisation is a multi-facet phenomenon. It has largely been associated with the disappearing borders between political, economic, social, as well as, cultural relationships. Furthermore, it has long been identified playing a principal role in the shaping a modern communication and relation between nations and within nations. Being a significant phenomenon throughout the human life, globalisation has been the center of focus by scholars. In fact, most consider globalisation as a key factor for welfare, development and integration among societies, thus leading to distribution of benefits among people globally. While many organisations in both developed and advanced nations largely from globalisation, it is believed that many organisations in underdeveloped and the developing countries drops behind owing to the lack of facilities necessary to compete in this globalisation era.

Globalisation and Innovation

Researchers in this in this topic have depicted different explanations, as well as, analysis regarding globalisation, in addition to its consequences. Inferring from most of their findings, the overall effect of globalisation is moving forward towards integration and convergence. Wallenstein, a German sociologist, described globalisation as a process of giving shape to some networks within which societies, which can be said to be somewhat isolated, merge in mutual dependency, as well as global unity (Sutton, 2007). Such and othertheories reflect the orientation of globalisation towards integration.

Cohen (2005) asserted that in the contemporary world, the intensified competition, which is a result of globalisation, as well as creation of more global economy, has served as the driving force for organisations to incorporate more innovativeness. Indeed, the rebirth of innovation, which includes the introduction of new processes, products, as well as, services is among the principle unintended consequents of globalisation.

Internet

When equipped with the enabling power of internet, organisations whether established or not can now-as never before-comprehensively participate in the process of innovation. Internet plays a key in allowing access to the global research information, which, according to Andrews (2010)is essential in order not only to generate but evaluate ideas and concepts, as well, and thereby turning them into profitable products, processes, in addition to, services. Besides research and evaluation, organisations are also provided with an excellent tool in form of internet to use in seeking out potential sponsors and investors from all over the world for innovation projects, in addition to potential collaborators in the innovation process.

Ideation

Asglobalisation, off-shoring, as well as, outsourcing turn up the heat on organisations competing in the world economy in which the use of cheap labor provided by the developing countries, the innovation process can be identified as assuming an even more essential role. Sutton (2007) clarified this by indicating that innovation is increasingly becoming the lifeblood of sustainable profitability. Organisations, especially the small ones, are increasingly rising to the task. Further, they are increasingly engaging in complementary process of innovation, which Hagel and Brown (2006) calls ideation. He simply put ideation as brainstorming ideas, as well as, the act of seeking out straight forward unconventional solutions to problems that are seemingly too complex.

Globalisation, Innovation and intellectual property

In his findings, Nickel (2006) indicated that globalisation has had significant effects in the society. Apart from opening national borders, it has also contributed towards the elimination of barriers to free trade, as well as, driving organisations to incorporate a higher degree of innovativeness. However, with increased openness, in addition to, cross-border transactions, globalisation has led to the emergence of malpractices such as intellectual property. According to Rosembaum (2012), as compared to large organisations, small ones are in an immense risk and most vulnerable to counterfeiting of intellectual property. The global economy is increasingly taking the shape of a flat economy. As such, it is more common that innovative thinkers in organisations, especially the small ones, lead the way with their innovative approaches towards organisational offerings. Overall, through globalisation, innovation surface and it has proved to be as important in our lives. As such, besides enriching people’s lives, innovativeness has continued to mold the global society asa sustainable place worthy of living by the human beings.

A critical review of the impact that innovation has had on Apple Inc. policies

In the field of economics, several innovation models have been advanced. They include linear innovation model, technology push, market pull, as well as the phase gate model. Many economists, in most of their analyses, tend to use the linear innovation model since owing to its simplicity attribute. However, in relation to the Apple Inc. case study, different innovation models will be used in order to comprehensively and critically analyse the impacts of innovation on the company’s policies.

This invention indeed proclaimed this company as the market leader in the PC industry. However, the emergence of IBM with a new innovation challenged Apple. Therefore, they had to counter IBM’s innovation with their own. By coming up with their own Operating software, that is, Mac, it is justifiable to contend that innovation was changing initial policies (Kim &Yoffie 2011). Though in line with the PC market, the invention of the PC was not enough to counter competition from IBM, Apple’s rival. Therefore, they had to change the policy on the manufacture of Apple PCs, and they had to establish their own unique Operating software to counter competition and maintain market leadership. Here, innovation was inevitable for expanding their initial policies.

The expansion of the nature of their policies can be derived from the reign of Scullery. Different from the original policies, Sculley had to push Mac into unexplored markets. Obviously, this innovation had an impact on the policies of the company. As such, the policies become diffused, since the company had to adopt other computer policies (Kim &Yoffie 2011). Also, the company was becoming the most appealing in the sale of computers, although, the profits were not generated from the initial invention. On the other hand, innovation was increasing rivalry between the two corporations, making Apple alter its policies further. Here, an alliance with the competitor was necessary; together, combined their innovation. However, this affected their policies negatively, leading to the fall of the company.

Further impacts and changes of policies from innovations can be derived from the era of Sprindler, who replaced Michael, due to the diminishing nature of their business. During his era, Sprindler introduced viewed innovation differently (Kim &Yoffie 2011). It is valid to assert that his idea of splashing costs and internationalising (Kim &Yoffie 2011) the company had negative effects on company policies. Indeed, his approach to innovation was killing off the company’s rules and regulation. According to Kim and Yoffie (2011) Sprindler’s ideas led to a fall in the company’s profits.

From the turn of events, the invention of Apple and different innovations from different leaders had negative impacts on the policies. Innovation leads to a decline in the company’s effective margins, despite the expansion of the company policies. In this context, the status of the company since its inception perfectly fits what is advanced in the linear innovation model. Positive impacts on the Company’s policies can be said to have surfaced during the era of the famous CEO, Steve Jobs. Some of the innovations that Jobs initiated were;

i. Reducing the Company’s product line,

ii. Hiring foreign manufacturers for Mac’s products and the Company’s National distribution channels,

iii. Creating a for direct selling,

iv. Investing more on research and development.

Indeed, it is justifiable to indicate that, different from other leaders, it was Steve Job’s who made significant attributes and approaches towards effective developments (Kim &Yoffie 2011). From the market pull innovation model, it is undeniable that Job’s act of integrating intense research and development led to the establishment of virgin markets. As a result, developments on the Mac lead to the creation of the iMac, which had unique attributes. Consequently, this lead to a significant increase in sales since Job’s innovation catered for the market needs. Furthermore, Jobs created awareness on the company’s products through immense advertisement campaigns. Here, Jobs employed a touch of innovativeness in an effort to maintain a competitive edge. Innovative advertising was vital and was intended to reach more customer base and increase sales, as per the company’s policies (Worthington, 2008).

Apple’s other technological innovativeness was evident in 2001 when it invented iPod and later, iPhone in 2007. This had a positive impact on the company’s policies in that the company changed to become a full-fledged digital convergence corporation. Indeed, the company changed its name to become what it is known as today. In this context, an economist employing the design of linear innovation framework would report that the earlier creation of Apple PC computer and Mac had diffused, and now, the cycle was beginning all over again with the invention of iPod and iPhone. This means that the original policies of the company were no longer meaningful since through innovation new policies were to be developed. As compared to the degree of change in Apple Company, the iPod era was, and still is, superior as this invention led to a series of innovations. For instance, the building of an ecosystem with the iPod accessory market, which ranged from docking, stations to tony cases. Simply put, there was the adds-on product, which helped in increasing the Company’s returns. Apart from spending the stipulated amount on iPods, customers would also pass on adds-on products, and this ensured that the company enjoyed maximised profits.

The introduction of the Company’s primary device, the touch iPod, which was excellent in its qualities and attributes, changed the face of competition. As such, this level of innovativeness led to new developments. The company was now being perceived by other companies trading in similar product lines as a threat.

Further, Apple invented desktop software through which iPods could be synchronised with computers. It also showed innovations by coming up with an iTunes Music store. Designing iTunes in such a way that there would be cost incurred on content downloaded was rare to popularising and success of the company’s code of becoming an entertainment hub. It is unmistakable to argue that this is certainly a positive impact on the company’s policy. As such, making clients pay for the content downloads meant that piracy of ideas was controlled, and loyalties were being paid to the owners of those contents. In this context, iTunes software was flawless in establishing and popularising the company code of shying away piracy of contents.

However, this transformation was suicidal to the policies of the company. The company’s fixed pricing structure was perceived negatively by the companies that owned these contents. Changing relationships was diminishing the already established policies of being of being an entertainment hub. It means that contents would no longer be provided, and this would not only reduce the profitability of the company but the customer base, as well. However, to ensure that the negative impact on its policy did not last, the company acted swiftly by revising the contract.

Also, the company’s policies were put under tremendous pressure from competition. Despite being a viable innovation, competitors were apparently operating in a fairer way then Apple. Further, the competitors also offered music streaming services to the clients, a situation that was not present at Apple. In the economic world, intense competition has negative effects on a company’s policies. This is typically where a company is being perceived as offering products or services at higher prices than other companies (Schumpeter, 2006). As a result, the company suffers diminishing policies, and worse, the company might succumb to competition. However, another innovation by Steve Jobs, lala.com, which was a music streaming service, ensured that the company avoided diminishing company policies by effectively fighting off competition and regaining the lost customers.

The next invention was iPhone. The company conducted a market research and saw the need to reinvent the mobile phone. Despite the field showing restructuring of its own kind, Apple’s innovativeness outclassed the already existing change from other companies from Nokia. It is clear that iPhone was excellent in its attributes as compared to other companies’ handsets. With a series of innovations on the original iPhone, customer base increased, and as a result, the sales increased, as well. Here, Apple had incorporated a revolutionary technology innovation into the mobile industry. After the first iPhone, other companies followed suit by inventing iPhones of their own. However, iPhone had already established itself as a market leader. Despite the many similar phones in the market, even today, customers increasingly identify iPhones from Apple Company as having a degree of originality and quality. In this context, the policies of the company had impacted positively by being associated with quality and originality. The present society has now being presented with a new piece of creativity and innovation from the Apple Company in the name of iPad. When it announced of a possible release of the product, the world began anticipating for the product. Just with the mentioning of a proposed technological innovation was enough to build further on the positives of the Company’s policies. Upon release, as anticipated, a great number of people bought the product, not that they needed it, but they wanted to experience another kind of inspiration from Apple thus building on the Company’s sales surplus, profitability and customer support (West, 2006).

With the inventions and innovations of the Apple Company since its inception just after Steve Job took over supervision in 1996, there have been positive impacts on the company’s policies as evidenced by the broadening of those policies. In contrast with the linear innovation model, innovation is not apparently leading to diffusion (Ward &Durry, 2009). As long as the work of Steve Jobs will continue being found on, positive impacts on the Company’s policies will continue surfacing.

Conclusion

From the critical evaluation, it is worthwhile to mention that the overall effects of innovation are positive impacts on the company policies. Innovation is fundamental in maintaining and increasing the profitability of a company (Metcalfe, 2008). The effect of innovation on the profitability of a company spells the effects of the same to a company’s policies. As such, referring to the case of Apple Inc., a series of innovations promote a company’s customer base leading to more sales and ultimately the profit margin. Innovativeness leads to broadening company policies, which also encourage more innovation. Fromm the analysis, it is also useful to stress that competition arising out of innovativeness is best countered by being innovative. For instance, while iTunes offered music downloads, it did not offer music streaming attributes, yet the competitors were. To counter this competition, Steve Jobs came up with lala.com, which began offering music streaming services and this competition was gone, thus recapturing the few customers that had turned for the competitors. As much as linear innovation model has played a key role in the evaluation of the case about Apple Inc. the market pull model of change was also instrumental (Teece, 2008). The period between genesis and the year 1996 was first evaluated using linear innovation model since the company developed from creation, then innovations and finally the dissemination of the original invention. However, since 1996 after Steve Jobs took over, the impact of innovation can be best evaluated using market pull innovation framework. As such, he increased research and development financial outlay thus discovering the market need. As a result, it led to development of new products, innovations ranging from iPods to iPads followed and thus increasing sales. Overall, for Apple Inc. innovation had positive impacts on its policies.