1. Short explanation about current Apple organization structure
Since Steve Jobs returned to Apple in 1997 he changed the culture and the structure of the company.
He organized Apple like a start-up, with a lot of different project teams and no such things as
committees. It was “organized on functional rather than product lines” (Burns, 2013) where the
higher level executives had not only mangerial but also technical skills. Steve Jobs had a close team of
15 senior managers which were the only ones to have “detailed knowledge of the final product”
(Burns, 2013). This centralized structure enabled quick decision-making of the board giving Apple the
opportunity to react quickly when its necessary (Johnson, Li, Phan, Singer, & Trinh, 2012). The
different project teams had no interaction with each other and were not allowed to share their
product developments with colleagues of other departments. This shows that there was a culture of
secrecy which permeated through the whole organizational structure. The possibly most remarkable
thing about the structure was that the engineers and industrial designers were enjoying a higher
status then other specialists (Lashinsky, 2012). This shows that the company under Steve Jobs was
mostly technical and design oriented.
2. Short description about recent changes in Apple
Changes under Tim Cook
Since former COO Tim Cook in 2011 became the new CEO of Apple there have been some formal and
informal changes within Apple. Tim Cook is making changes which were not possible under Steve
Jobs. These changes are not only concerning the organizational structure, but also the culture. The
culture of secrecy is easing up under Cook. He is not only more open to the public (e.g. visiting a
foxconn facility) but also to investors. This is in line with the structural changes. For example where
under Steve Jobs the engineering department was isolated from the others, Cook wants project
management and supply management to be present in important engineering meetings (Lashinsky,
2012). In October 2012 Apple further announced their encouragement for collaboration across
different departments like hardware, software & services under Tim Cook (Apple Press Info, 2012). It
is notable that these changes may be strongly related to his former position as COO such that he is
putting more emphasis on the operational functioning of the company.
3. Description about the technology market where Apple operates in and the downfall of several
competitors (and the still standing ones like Samsung and Microsoft)
Apple, being the huge company that it is, is one of a few major players in the technology market. It is
one of the most successful companies in the market for mobile digital devices and computers.
Apple’s major competitors are Microsoft and Samsung. Microsoft is the leader in the market for
personal computers, thus mainly competing with Apple’s iMacs. The market share of Apple’s iMacs is
7.54%, while 90.81% of the personal computers worldwide use Microsoft’s Windows as operating
system.
Samsung is also a huge player in the technology market. They are Apple’s main competitor in the
field of mobile digital devices, like mobile phones and tablets. Of the devices in this market 53.68% is
an Apple product using iOS. The Android operating system has a market share of 29.42%. Nearly half,
47.5%, of these devices was made by Samsung.
In the market for smartphones there are but a few players, which makes the industry an oligopoly.
However, Apple and Samsung are the biggest players by far. In june 2013 Apples marketshare was
39.9%, while Samsung’s marketshare was 23.7%. The other companies are making very small profits,
or even losses. One of the other competitors, Nokia, was failing to keep up with the competition, and
as a result the company has been taken over. The company taking over Nokia was Microsoft, and as a
result Microsoft strengthens its position in the mobile phone market.
4. Part about organizational structures in the market by the survivors and the victims
Nokia, one of the former market leaders that faced all the challenges and struggles with disruptive
technology changes is a perfect example of a so called victim in the mobile phone market. Nokia
needed to change its organizational structure in order to adapt to the missed revolution: the smart
phone. But also to compete with the mobile phone producers in emerging markets who can make
fast and cheap handsets at the lower end of the market. Apple and Samsung are, as already stated,
the market leaders of the current mobile phone market. These two companies have in common that
they are organized as cross functional project teams which focus on a product or special market
In May 2010, Nokia released a press document which stated: "In addition to extending our leadership
in mobile phones, we are decisively moving to respond faster to growth opportunities we expect in
smartphones and mobile computers," says Olli-Pekka Kallasvuo, CEO of Nokia. "Nokia's new
organizational structure is designed to speed up execution and accelerate innovation, both shortterm and longer-term”. The change to a structure of three focus areas where the focus lies on
innovation and mobility of the company in fast moving environments states that this was one of the
problems and pitfalls before.
5. Compare Apple
When Apple introduces the iPhone 3 in 2007, Nokia´s sales went down by 66% in the US alone. This is
an example of an innovation that people do not expect on forehand but cannot live without, after
recognizing its potential. A very important factor, according to the former CEO of Nokia Stephen
Elop, that helps big companies to innovate is that `innovation quite often is helping other people
understand, that there are different ways of doing things or something that they may not know they
need or may not understand that needs to be done, so you have to give people permission to go that
extra mile of thought´. This is an insight that Nokia got from the plunging market shares the last
couple of years. An insight, and foremost a strategy that Apple and Samsung already implemented.
The opportunity for employees to focus on radical, disruptive innovations rather than incremental
innovations. This is a process which takes time, risk and costs a lot of money.
The way that Apple’s organizational structure was designed was to enable these initiatives. To set
huge budgets for risky projects (Lashinsky, 2012) and to remain the secrecy within the company such
that the competition stays behind. Keeping the design in-house but the production in the emerging
markets creates enormous margins for Apple to fund the R&D and Marketing activities.
6. Pose our opinion about that they need to adapt to maintain their position. (200 words) Joris &
Dinant
While having higher market share of any given market is not necessarily the best strategy, not having
a mid-priced smartphone will hamper Apple’s ability to get users into the Apple ecosystem. Since its
users have a high likelihood of sticking with Apple, the potential September 10 announcement of a
more entry-level smartphone in the form of a much cheaper IPhone could have major long-term
benefits for Apple. Concentrating on innovation was Apple’s overall strategy to stay competitive in
the market place. Apple’s strategy was to stay competitive by providing the customers with constant
innovative products that solves basic problems and all Apple’s guerrilla marketing tactics revolved
around that strategy. Apple should focus less on the competition with Samsung and more on their
own capabilities. Apple is a company, which is able to change the world and create different markets.
However for the past few years Apple is standing still, which creates uncertainty amongst investors
and shareholders, an example of this is the latest version of the IPad, the IPad air. This new model
shows that Apple Inc. is innovative but only in sectors where the risk is relatively high, whereas under
Steve Jobs these risk factors where not taken into account when entering/creating a new market.
Lashinsky, A. (2012). How Tim Cook is Changing Apple. Fortune , 165 (8), 110+.
Burns, P., Corporate Entrepreneurship: Innovation and Strategy in large organizations, Palgrave
MacMillan, 2013, Third Edition, 182-183.
Johnson, K., Li, Y., Phan, H., Singer, J., & Trinh, H. The Innovative Success that is Apple, Inc. (2012).
Theses, Dissertations and Capstones.Paper 418
Lashinsky, A. (2012). Inside Apple: The Secrets Behind the Past and Future Success of Steve Jobs
Iconic Brand, London: Alan Murray (2012).
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