Operational Management by Apple towards Customer Satisfaction

Studying an organization of your choice at organizational level, or department level critically assess the operational methods and strategies adopted to provide the product(s) in a way that give(s) maximum satisfaction to the customers or clients.

Apple is an American based company specializing in the design, development and sales of electronic devices, online services and computer software. The entry of the company into the market revolutionized the electronics industry through the introduction of well-thought and customer-oriented designs (Johnson, Phan and Li 33). Through its innovative strategies, the company rose to be the greatest information technology corporation with a revenue turnover of over $700 billion by the year 2014. The company also stands as the biggest publicly traded company in the global market capitalization. When the company ventured into the telecommunications industry, it created a marketing mix that attracted a wider base of fans always yearning to get an outlook of Apple’s product features. Unlike most companies who focus on attractive brands and labels, Apple creates products specifically for their target market, and strives to meet their needs. Unique, utility and well-designed brands are the core pillars of the company’s success in a competitive market, and to create a wider customer base, the company resorted to transforming minor product purchasers to brand representatives (Gallo 68). The apple company’s success is centered on its operational strategies which are focused on the needs of its target market and, thus, using customer feedback as a basis for designing future products. Different operational approaches adopted by Apple towards achieving competitiveness vary from marketing, advertisements, informed innovations, and globalization strategies, which has contributed to the company presenting itself as more focused on the satisfaction of its customers and meeting their needs (Gallo 73). To counter the approaches of its competitors in the market, Apple emphasized on the quality of its products and in return delivering more efficient and reliable products like the iPhone. Steve Job’s approach to innovation is also another contributing factor towards achieving customer satisfaction. The product designers are expected to design products to meet their personal needs and desires and in the end, achieve customer satisfaction since the delivered product meets their needs (Hurley-Hanson and Giannantonio 15). The essay analyses the operational methods and strategies by Apple to achieve customer satisfaction.

Organizational Profile

Steve Jobs understood the role played by an efficient organizational structure towards achieving successful innovation focused on customer satisfaction. A firm’s corporate profile is the core pillar that creates opportunities for growth in a competitive business industry. Apple’s organizational structure has a great link to the innovation and leadership of the CEO. After a closer analysis of the structure, Tim Cook slightly transformed the structure to suit the industry demands and the market. Previously, all operations had to go through Steve’s desk, which was less effective (Hurley-Hanson and Giannantonio 35). Apple’s organizational profile is characterized by the Spoke-and-wheel hierarchy, function based grouping, and product based grouping. The spoke-and-wheel authority promotes the collaborations between the various company departments that include the hardware and software teams who need to work hand in hand at all times to deliver a product with the desired features. The structure provides for more flexibility and autonomy despite maintaining the spoke-and-wheel profile with Tim Cook as the center (Montgomeriea and Roscoe 296).

The upper levels of management of the Apple Company are united by the function-based grouping whereby all the senior members reporting to the CEO has an assigned functional responsibility. The company has positions of senior vice presidents in charge of industrial design, marketing, and retail hence the capability of the top management to address the firm’s needs based on the functional areas (Gallo 72). The other characteristic of the company profile is the product-based grouping whereby the lower level employees and structures of the company are grouped based on the product needs. Under the senior vice presidents, the company has positions for vice presidents responsible for different products. The company has a vice president in charge of iOS apps, iPad, and consumer apps. The aspect of organizational profile enables the company to handle specific product needs with ease. The organizational profile of the company provides for a stronger control over the firm thus empowering leaders like Cook to be in charge of everything that arises within the company. It ensures the senior presidents and the CEO control all the processes within the organization (Johnson, Phan and Li 22). Since the structure is characterized by less flexibility, the leadership approach by Tim Cook has enabled collaborations between different departments of the company. However, it is evident that rapid changes cannot be achieved in the business since all processes have to go through the hands of senior VPs and the CEO.

Operations Objectives

Apple is a company that is committed to achieving the best user experience to its clients through the delivery of quality and whole rounded products. By developing its hardware, operating systems, operational software and other services, the company can provide its customers with desirable products that are innovative in design, easy to use and seamless integration. The company believes in research, development, marketing and advertisement is the pillar of achieving higher sales on their products (Montgomeriea and Roscoe 292). The other objective of the company is to support the development of hardware products and third party applications towards complementing the company outcome. The other unique strategy of the company is to expand its distribution network so as to reach more users and deliver them high-quality sales with the core aim of achieving satisfaction and building customer loyalty. A comprehensive research on the client needs as stated in the company vision makes them deliver their clients with products that create excitement and thus satisfaction (Montgomeriea and Roscoe 294). Apple is unique in its marketing approaches, considering that they never focus on the features of their products, but rather how the product can change the lives and the experience of the users. In her strive to attract more customers, the company labels their products well by having the company logo at a point where someone has a continuous vision thus creating interest. The lighting logos on screens are another approach by Apple to ensure that their brands can be noticed at all times. The aspect beats competitors in TV advertisements considering that their logos are hard to see.

For Apple to achieve a complete delivery of satisfactory brands, they emphasize on the design of both hardware and associated hardware, hence allowing for the effective decision making on the type of hardware to be created and should be compatible with their software (Carpenter and Glazer 111). The aspect has been a core basis for achieving competitiveness in the market. There is no time wasted in trying to integrate software created by a different company with own hardware like most companies do hence boost the efficiency and reliability of the company products. Unlike other companies that are organized as business units, Apple works as a company that manages products and not categories. Studies show that companies managed as business units have the challenge of internal competition, which in turn compromise on the product quality (Naveed, Akhtar and Cheema 62). Through product management, the company is able to deliver products to their customers that are compatible with each other and also having accessories that are universally used by multiple products. From the approach, customers can enjoy a great experience on the brands, hence building trust on the brands which is essential for achieving customer loyalty.

Analysis of Operational Activities

Supply Chain Operations

The globalization of the Apple Company meant that the company was exploring newer markets outside the home country. The situation meant that the company had to offshore production, supplies and inventories to effectively reach the desired new markets, and in return, benefit from the variations in infrastructure, economies and trading regulations. Although the little literature is notable on how the Apple Company manages its supply chain operations, the overall outcome of the transition of products from the production of the users is a clear indication of successful operations (Končar, Leković and Stanković 90). The approach employed by Apple in the market is unique, considering that it looks into creating customer needs by creating and offering innovative products full of unique features. From the onset, the users might think that they do not need them, but with persistent use, they realize that it is a necessity and not an option. With the aim of achieving successful supply chain management, the company buys different parts from various distributors and ships them for assembling in China, after which the ready products are shipped directly to the consumers who have placed their orders online. The company also encourages users to send back products that have reached their end life to the nearest stores or recycling facilities (Končar, Leković and Stanković 85).

Tim’s entry into the company saw a transformation in the supply chain management with the aim of enhancing market competitiveness and reducing warehousing costs. By maintaining a low inventory, the company managed to reduce risks of fall due to sudden announcements of new products by competitors. The ability to forecast a demand for a particular product allows for long term ordering and in return creating demand for the suppliers limiting the capability of the competitors to place orders, making it easier for the company to deliver products continuously even on high demands, a scenario that promotes reliability and thus boosts customer satisfaction (Naveed, Akhtar and Cheema 62). Since the company understood the role played by inventory in overall productivity, it left behind the fast turnover approach and adopted a no rush to sell plan which required that products delivered to a shop on a given day can only be sold the following day and thus reducing cases of inventory errors and in return ensure that the customers are served in a more accurate manner, with the necessary speed, and in turn boosting consumer confidence and thus satisfaction (Kaur and Arora 943). The principle maintained by Apple in its sales strategies whereby the distribution stores could only be allowed to sell Apple products eliminated the challenge of setting own products from those of the competitors and in return achieved great customer loyalty (Carpenter and Glazer 112). To create a customer experience, the company created space within its stores to allow clients to interact with the various products and in deriving the excitement, the customers are satisfied with their product preferences.

Globalization Operations

The rising technological advancements have led to the expansion of Apple to international markets leading to unprecedented income levels. By staying ahead of the system through knowledgeability of the transformations in technology, Apple manages to stay competitive in the market and meet the demands of its customers (Carpenter and Glazer 113). In accessing international markets, the company utilized many strategies that include foreign licensing and outsourcing, imports, exports and foreign direct investments. Through imports and foreign outsourcing, the company manages to significantly lower the costs of the products by up to four times with products such as the iPad selling at $499 rather than $14,970 (Johnson, Phan and Li 28). By reducing the costs of its products, the company manages to attract a wider preference by the customers and due to the enterprise’s product reputation, it can compete effectively with other companies with similar products. Since consumers consider the quality of the product and its cost, stands a better chance of expanding faster into new markets considering that its products have a higher customer satisfaction index. The greatest success of Apple in overseas ventures was the introduction of iPhone4 released in over 88 states, a shift that confirmed how important the globalization of the company was towards its success (Johnson, Phan and Li 26). Through foreign licensing, the company managed to expand its product brands to markets that appeared to be untouchable in the past. Currently, Apple is focusing on China in its globalization strategy due to its strong economy, larger market population and cheaper market, which would substantially contribute to cost reduction, which is necessary for price reduction and hence customer satisfaction (Naveed, Akhtar and Cheema 65).

Adoption of New Product Form Factors

Apple is known to be an extraordinary innovator that has always delivered products meeting the needs of its clients. Apple has never innovated to compete but rather to satisfy its clients, an aspect that has contributed to the competitiveness of the company at all times and an expanding customer loyalty (Schneiders 51). The developing technologies in smart products create a demand for smart products by electronic companies. Since Apple had in the past delivered smart products like the iPhone, iPad, and Apple Watch expectations were raised on Apple TV sets with customers expecting a revolutionized viewing platform compared to other sets. Capitalizing on the demands, Apple Company always strives to ensure all customers are satisfied (Montgomeriea and Roscoe 294). The loyalty shown by Apple customers with previous products will definitely rush to buying the new television set. To continue with its focus on delivering extraordinary products and satisfying customer needs, Apple upgraded its TV set to offer inclusive viewing, and gaming experiences based on its long-term consistency and hence standing out as the best electronics manufacturer among the many and above all satisfy the expectations of the clients which is essential for business growth (Naveed, Akhtar and Cheema 63). The motion sensing capability and video conferencing aspects will be the core determinants of the product’s success in an already flooded market.

Competitive Positioning

Although Apple is not always the first company to introduce a product in the market, they manage to achieve a market breakthrough through the reduction of product prices during production and besides produce masses of the product thus satisfying the high market demand. The iPod, for example, revolutionized the music industry by providing a capability of storing an entire movie library in a gadget smaller in size compared to own palm. The introductory price of $399 might have appeared expensive, but far much cheaper when compared to its capabilities hence the reason it survived an already occupied market (Johnson, Phan and Li 28). On computers, Apple was relatively among the last manufacturers of the gadgets, but became the first to do mass production and took them to a higher level. The compatibility with most software, open architecture and color graphics won the trust of many customers and hence achieving competitiveness against already established manufacturers and their products (Mickalowski, Mickelson and Keltgen 7). The unique positioning approach by Apple at all times contributes to its success in all markets a reason that is attributed to the rising customer loyalty.

Advertisements

Apple is recognized for its outstanding ad techniques that have been designed to represent the organization’s plan aimed at attracting creative personnel to market the products. Apple is a company that knows the value of the advertisement, and on the other hand, employs far much cheaper and efficient approaches. In 2009, the company used US $501 million, which was far much lower that the spending by Microsoft, which was the US $1.4billion (Mickalowski, Mickelson and Keltgen 5). The revenue spent by Apple between 2001 and 2009 decreased from 5 percent to 1.37 percent; with the final figure, lesser by half compared to that used in the advertisement of Blackberries. The ad strategies employed by Apple reduce cost and increase profitability, a reason for the cheap and high-quality products delivered to the markets thus boosting customer satisfaction.

Innovation and Consistency

The core pillar that drives Apple’s success is uniformity in its dynamic changes. The company offers its customers different ways to enjoy their brands. The availability of diverse products suitable for all situations, locations, and applications makes it easier to build a loyal customer base since all their needs can be satisfied with the availability of company products. Although the company brands may be diverse, they share a common architecture, and it is this consistency that makes the users of Apple products conversant of what is at stake before making any purchase (Gallo 69). The understanding of the underlying hardware makes it easier to adapt to new products and clients are always satisfied with the features presented in new products and return to make repeated purchases. A look at the products by Apple offers a unique feature in artistic designs to the user interface experiences. The products are attractive and accessible as emphasized by the smiling icon, bright colors, and the slick look of the hardware, hence always reminding the user of the appealing offers by Apple and hence enhancing satisfaction.

Marketing

The core functional activity capitalized by Apple to achieve customer satisfaction and expand its customer loyalty is marketing. However, the approach towards marketing from Apple is unique since it is not focused on the product, but rather the needs of the customer. The company employs the customer intimacy strategy that is aimed at offering a broad and unique range of services that allow for the customization of products to meet client needs. To get a better understanding of the customer needs, the company appreciates the feedback obtained from the users and thus creates products based on the same (Johnson, Phan and Li 25). To achieve customer intimacy, the Apple Company is organized in a more productive centers management rather than unit management hence changing quickly to the needs of the customers. Apple has employed a customer segmentation approach so as to ease the management of customer needs; this has been achieved by grouping the product market into various groups of buyers having unique needs or characteristics. The company has segmented the market based on demographic factors such as age, gender, occupation, religion, income brackets and education (Mickalowski, Mickelson and Keltgen 5). The other approach used by Apple is regional segmentation considering that the various regions have distinct product needs. The four regions focused on by Apple include America and Latin America, Africa, UAE and Asia/Pacific. To easily meet the demand of the various customers, the company opts to develop the specific use rather than single products with multiple features. By segmenting its market to specific end users Apple has managed to be the largest revenue contributor in the industry (Montgomeriea and Roscoe 291). Instead of targeting a wider market, the company believes in targeting a particular market and providing them with their desires thus achieving satisfaction.

Unlike their competitors, Apple is noted to dictate their clients on their needs and desires through introduction of new products rather than undertake extensive market research. The focus on innovations by Apple justifies their beliefs of ignoring the need to learn about customer needs considering that most of them have never seen any innovation similar to what they can offer. Since they do not fully ignore market research, their approach is far much different since instead of using the new or potential customers, they use the existing customers in undertaking their market needs surveys (Schneiders 46). The study is achieved through periodic online surveys done on the existing customers to communicate possible suggestions on product developments or improvements. The outcome of the online reviews is extensively used by the company at advanced stages of product design since they always figure out on their wants and project them to the customers’ needs. By owning a product, the company strives to satisfy themselves by achieving the best designs; the pride gained by holding the best product can then be transferred to the potential customers who would want to be associated with the best (Montgomeriea and Roscoe 292). To achieve its marketing objectives designed to achieve customer satisfaction, the Apple Company has a marketing unit with its head being the marketing chief with the core roles being to carry out all the marketing planning as expected. The company uses a “Golden Circle technique” whereby the marketing focus is not on the “What” they do, but rather on “why” they do certain things (Schneiders 48).

Recommended Changes

Although the Apple Company is successful in managing its operations through set structures and values, it is important that the company employs flexible strategies in exploring newer markets. From the analysis, it is evident that the company only focuses on the needs of existing clients who would in turn act as ambassadors of their products. However, when exploring new markets, there are numerous challenges considering that there are no available customers who understand the value of the high prices associated with Apple’s products. The other aspect that needs a relook by the company is the issue of pricing; it has been noticed that Apple products are more than luxuries, and so in the case of economic downturns, it will be slightly impossible for the company to make sales as people will opt for the cheaper related products. To achieve customer satisfaction and loyalty, the company should consider the needs and capabilities of different groups of individuals. In new markets, the company should define strategies that will easily work out in new markets and of great concern is the pricing (Montgomeriea and Roscoe 292). During economic downturns, the company should also find strategies towards maintaining and satisfying their customers either through subsidization of product prices or by designing much cheaper products with almost the same features as the original. The company should try the alternative strategies in new markets so as not to destabilize the existing markets, and if they fail, then the company should opt out of the markets.

Conclusion

The aspect of operational management is a crucial factor that determines the success of a business enterprise. Executive management ensures that the objectives of the company are achieved as desired. Since without customer satisfaction, a company cannot sell its products and hence the lack of profits. As Apple strives to satisfy its clients and achieve competitiveness in a flooded market, the company focuses on product designs and unique marketing strategies. As other companies work to deliver the best products, Apple works towards satisfying the customer needs and building a long-term loyalty. The qualities of the products are satisfactory, and clients are willing to pay the high costs since the features presented by the products are unique. Ensuring accessibility and reliability of its products in the market creates the need for efficient supply chain processes which can be achieved through operations management. The innovation approaches and consistency of Apple products attract more customers to Apple’s new products, considering that they can easily predict their performance and satisfaction based on past experiences with Apple products. Without operational management, it is not possible to quickly achieve customer satisfaction at all times. Operational management informs the means of achieving the desired outcome which will in return satisfy the clients and build long term loyalty.

Works Cited

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