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Management Innovator

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Henry Ford did not invent the car, but he made it available and appealing to every American. Steve Jobs and his friend Steve Wozniak brought about a similar revolution in the sphere of personal computers. The founders of Apple implemented the concept of a small, relatively cheap desktop PC that an average person can use. “Jobs realized that computers could be not just boring machines for doing calculations, but they could also serve as tools for creativity and entertainment.” (Elliot 2011, p.18). As a marketing genius, he came up with the idea of creating stylish products that would not leave a buyer indifferent. As a stubborn perfectionist, he made his idea come true, setting a new benchmark for competitors.

Nowadays it is hard to imagine any other businessman who has revolutionized not only one but four fields of modern business: computer technology (Mac), audio (iPod), mobile communication (iPhone), and animation (animation movies by studio Pixar). What other person could boast that they have managed to make a fortune and made millions of people happy, encouraging them to respect their company with an almost religious enthusiasm? “These technological innovations are part and parcel of everyday life for millions of Americans. They are part of our culture, thanks to Apple co-founder Steve Jobs, who recently lost his battle with cancer.” (Nance 2011).

Undoubtedly, Steve Jobs’ management style is not typical of corporate America. He was a perfectionist. This feature played a great role in his success achievement. Steve always tried to do his best to achieve the top position for his company. In my opinion, he succeeded due to his beliefs. Steve strongly believed in the way he had chosen and everything he did. When it came to the question of whether to follow his intuition or expert’s opinion, he would always choose his intuition. “He never mellowed, never let up on Apple employees, never stopped relying on his singular instincts in making decisions about how Apple products should look and how they should work.” (Nocera 2011). The feature to believe in his own intuition and to find answers in his own head and feelings is unique. He built his life and management style according to his own rules and became an innovator.

Steve Jobs was considered to be a tyrannical innovator. “Many employees of Apple even called Jobs –“His Majesty”. Jef Raskin, who worked as a manager in Apple in the early 1980's, described Jobs as an extreme autocrat. He told reporters: “Steve could be a great King of France” (Elliot 2011, p.15).

The leadership style of Steve Jobes does not meet standards because of authoritarianism

He managed his business ignoring the clear line and staffing. “He arrogated to himself the authoritarian right to give instructions to all employees, regardless of the intermediate levels of leadership.” (Steve Jobs (Steven Jobs) 2008). Brilliant innovators have always used such a leadership style. He took all the responsibility and authority, ignoring the hierarchical organizational structure. “Napoleon and Hitler were political leaders who acted in the same manner.” (Steve Jobs (Steven Jobs) 2008) Steve Jobs was able to take and keep all the power that was given to him. In my opinion, if a person can cope with power, they are entitled to have it. He could turn all his dreams into reality having become one of the most successful people in the world. This approach clearly distinguishes him from traditional managers, who are not able to rely only on themselves.

Jobs always aspired to make Apple and its products occupy the leading positions in the information technology market. “Jobs and Apple did not create the computer mouse, podcasting, or the touch screen, but they recognized their value and integrated these innovations into their products.” (Qualman 2011). His ability to anticipate trends and set a fashion in terms of innovation and style helped him to achieve his goal. He formulated this concept in the following way: “The words of Wayne Gretzky are close to me. “I skate to where the puck is going to be, not where it has been.” This is what we have always tried to achieve at Apple from the very beginning. So it will continue” (Elliot 2011, p. 113).

Thus, the leadership of Steve Jobs has always been based on finding and promoting new ideas, and that is why he attracted followers and won the trust of employees and consumers. Jobs is a classic transformational leader, inspirer, who encourages members of his team to change and develop themselves, to be involved in the process of updating and innovations, making them feel a part of something great. A prominent feature of this leadership type is reliance not on external incentives, but on shared values and a sincere devotion to ideas.

As a leader of the transformation type, Steve Jobs was a creative person who could think broadly and imaginatively creating bright ideals that people were inspired by. For example, his idea of creating computer as “a tool to change the world” attracted a lot of Apple’s gifted experts. Jobs is also known as a charismatic leader, because he did not just lead the process of changes and paint an attractive picture of the future, but he also influenced people by his extraordinary personality. It helped him to strengthen the motivation of his subordinates. Many people said that Jobs had a sort of “aura” that attracted people and made everyone respect him.

1b. Identify Steve Job strengths, core resources and competences.

The leader of Apple was certainly a bright, charismatic, and controversial person. On the one hand, he was an inspiring ideologist and strategist; on the other hand, “Jobs is described by some as being manipulative, dishonest, and boorish” (Kramer 2010). His complex personality included many conflicting features and, at the same time, it was a source of incredible professional and business success. “The nasty edge to his personality was not necessary. It hindered him more than it helped him.” (Isaacson 2012).

One of Steve Jobs’ strengths was the ability to predict. Several years ago, Jobs said: “You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new” (Elkind 2008). That was his approach to development. “he understands what appeals to customers, and he acts decisively.” (Conaty 2011). Jobs had never tried to meet the needs of the masses, but he had always tried to do something that would attract these masses and make them love his product. Fashion did not influence him because he set fashion. There are very few people in the world who could predict what people would want before they started to want it, even in the situations when nobody had enough courage to believe in some ideas. “A great deal of Apple’s agility comes from the direction and vision of its senior leadership and its corporate culture, which reinforces the need to get ready for “the next big thing.”(Sullivan 2011). The chance for Apple to find a leader who could do this as Jobs did is very low. His ability to predict contributed to the success of the company more than anything else. “Steve Jobs was always a visionary genius, but what makes him so compelling to me is the fact that after creating great products that only reached the few, he returned, learned and adapted his vast creative talents to create whole new product categories” (Hill 2011).

His next strength was the ability to risk. When Apple firstly announced the iPhone, many people in the technology industry only smiled. Leaders of top companies called the new product a “toy”. Most telecommunications service providers simply ignored the iPhone for several years. Apple had a lot to overcome to create a successful mobile phone. It took years. It required a lot of money. It was necessary to establish a large number of partnerships. There was no guarantee of success. “In fact, in 2007, when Apple first released the iPhone, it was likely that the product would be blocked by providers or even removed from the market.”(Elliot 2011, p.114) All the effort, expenses, and time could turn into a nightmare and just a waste of money. It was a huge risk; however, when the company succeeded, it turned into a huge profit.

The following strength is Jobs’ perfectionism. “The development of the Macintosh, for instance, took more than three years, because of Jobs’s obsession with detail.” (Surowiecki 2011). He had a huge desire to create an ideal product. Jobs once said, “Actually, I’m more proud of the things that we did not do than the ones we made. Innovation needs to say “no” to the thousand of things” (Elkind 2008). Everyone knows the fact that Apple promised the white iPhone of 4th version but postponed its release several times. The product was not good enough, and Apple refused to show the White iPhone 4 to the public until the time it was perfect. Most companies would have released a product before. Like everyone who works in the field of technology, every month, Steve Jobs came across tons of products that were to be completed and were never released. “Apple has a maniacal focus on perfection.” (Breillatt 2009)

His abilities to follow his intuition, not to stop in difficult situations, and to believe in himself played a great role in his career. His inner energy and management talent inspired a lot of people to create the most important things in their career. Many people, who are not members of the company, were shocked by the stories about his attitude towards his employees. However, insiders say that he was also a very enthusiastic, charming, and extremely generous person. When he praised an employee, he did it as if they won the Grand Slam tournament. “This style of leadership has created a strong sense of execution and excellence at the company - but will also be hard to replace.” (The Real Succession Plan For Steve Jobs 2011).

Paragraph 2

2a. Critically evaluate and argue the statement above by analysing and comparing Steve Jobs’ leadership style and qualities with available theories of leadership in today’s context.

Steve Jobs’ leadership style differs from those mentioned in textbooks. However, this deference does not make him less successful, but it actually contributed to his success. According to Jeffrey Pfeffer, a Stanford University professor, “Most books about leadership read like the Scout manual: CEOs and top managers should be authentic, considerate, sensitive, and modest, as well as creative, smart, and strategically brilliant. All true – but not very useful in the real world, where the person in the corner office might be as approachable as the junkyard dog. Exhibit A: Steve Jobs” (Allen 2011).

The best way to see the difference between his leadership style and popular theories is to analyze and compare them.

“Because of his “manipulative” behavior he is considered by some of his employees as autocratic.” (Kramer 2010). All textbooks teach to create a strong organizational structure and support it. Steve ignored structures and preferred to give orders himself. While many CEOs were choosing to control the company through top managers, he was always involved in all the working processes of his company and controlled everything himself. “Every Monday morning he brings them together to review products and the challenges of designing and executing them.” (Conaty 2011). He was not a creator of a new computer, but people would have never seen this product without his management. He understood that it was important to provide space and conditions for people who can create innovative products to inspire them. He definitely succeeded.      

Leadership theories tell us that while making a decision, try to check all information and listen to advice of analysts and experts in the necessary field. Jobs never listened to experts. “He always relied only on his intuition.” (Gillespie-Brown 2012). Many theorists would say that this unconventional intuitive approach to business is unsuccessful and inefficient. On the one hand, theories advise to risk; on the other hand, they advise to risk only if the risk is not too high. Jobs was a very risky person from the very beginning. “He started his business from creating an uncertain product that seemed to have no chance to succeed.” (Elliot 2011). However, his beliefs and insistence played a great role in the transformation of an uncertain product into a top product in the world.

There are two power motives that are described in textbooks. “The fist one is the desire to get wealth and status. This motive is called personalized. The second one is a socialized motive, which is the desire to use power for the greater good.” (Charles 2008). Steve jobs’ motives do not belong to any of these categories. He always talked about self-development. According to him, every person had their own way in life, and “the best way to live this life properly is to listen to your intuition and follow it.” (Steve Jobs (Steven Jobs) 2008). His intuition and the way he chose led him to power. These motives seem to be from the first category, but power was not his driving force.

Personal traits for effective leadership which are described in textbooks are restraint and patience. Jobs was known for his aggressive and rude manner of communication, which is not appropriate for business ethics. However, his passion and self-confidence helped him to sign his best contracts.

Steve Jobs’ personality is not a classic example of an effective leader. “Nevertheless his charisma, self-confidence and passion for work overshadow all his negative characteristics thus making him one of most successful CEO’s of the decade” (Kramer 2010).

2b. Critically evaluate and argue how Steve Job had grasped the importance (issues on the strategic planning process) and managed the implication of the domestic and global environments’ that Apple competes in.

“Steve Jobs, Apple's co-Founder, described Apple as a "mobile devices company" - the largest one in the world (Apple's revenues are bigger than Nokia, Samsung, or Sony's mobility business).” (Apple's Branding Strategy 2012)

The date of founding Apple Computer Inc is officially April 1, 1976. “He was, of course, the charismatic boy wonder who at age 21 had co-founded Apple with Steve Wozniak in his parents' garage back in 1976.”(Elkind 2008). Moreover, the model seemed to be so successful that the future partners decided not to wait and tried to organize its production.

For 10 years, Apple occupied top positions in the computer market under the leadership of Steve Jobs. The first model, Apple I, sold over 200 machines, which was a good indicator for an unknown company at the time. Apple II, released in 1977, had remained the most popular personal computer for 5 years. However, a series of setbacks followed the success. By 1985, after a commercial failure of Apple III and loss of a significant market share, and continuing conflicts about leadership, Wozniak left the company, and later Jobs also left it. However, he did not stop. “He also started up computing firm NeXT which was later bought by Apple.” (Prasad 2011). This company started the development of hardware and manufactured workstations.

A year later, Steve Jobs tried himself in a new field. The adventurer and computer producer became a filmmaker. He became one of the founders of the famous animation studio Pixar. “He bought Pixar, transforming it from a tiny animation house to an industry leader responsible for films such as «Toy Story».” (McInerney 2011). However, Steve felt tired of this activity, and in 2006, he sold Pixar to Walt Disney. Thus, being a member of the board of directors of Pixar, Jobs entered the history as the largest private shareholder of Disney being a private person. “Jobs owns 7.3% of Disney, worth $4.6 billion, in addition to Apple stock worth $682 million.”(Elkind 2008)

Jobs returned to the Apple’s board of directors and took the post of an interim manager in 1996. Apple was still in depression. Jobs said "I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life." (Korn 2012). In 1998, being tired of huge money losses, Jobs closed unsuccessful projects (including PDA Newton). In 2001, Steve Jobs made a presentation of the first iPod. A few years later, the money received from sales of this device was the main source of revenue. By 2006, Apple had gained its position in the computer market back.

Thus, we can say that Steve Jobs was in the right place at the right time. Also, companies led by his enthusiasm and perfectionism succeeded and occupied top positions. He was able to leave when it was necessary, take actions, wait for perfect results, and say “no” to unsuccessful projects which needed updates.

Steve Jobs’ strategic planning started from his employees. "A players hire A players, and B players hire C players. We want only A players here."(Yarrow 2012). He worked with a small team of executive managers but he knew everyone in his company and knew what everyone was occupied with. “Jobs surrounded himself with people who were not only what he called “A-players,” but also people who—vitally—could tolerate his exceptionally high standards.” (McKnigh 2012).

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Steve Jobs, in fact, completely changed computer, MP3-player, and mobile phone retailing by organizing a new way of distribution directly to consumers. The company refused to use the services of intermediaries such as Best Buy and Fry.

Steve Jobs created a comprehensive strategy of direct sales to consumers, and it worked. Apple took the leading position in the market due to the online store iTunes. A network of Apple retail stores also operated highly successfully.

Jobs’ approach to organizing the retailing process included an aspect that can be called a Trojan horse. The Windows operating system is supported by Apple products. If iPhone users install Microsoft Exchange, they are already halfway to the fact that their next computer will be a Mac. When they buy or upgrade their iPhone in the Apple store, they can make a connection to a mobile phone there, without visiting the operator office, which is a classic example of buying everything you need in one place. His desire to control the product overall was the key aspect of his retailing strategy.

The computer market in America has very strong competition. Several big successful companies, like Lenovo, Dell, HP, operate in this market. Thus, it is very difficult to cope with competition. A company needs to provide innovations at relatively low prices and make a profit from this. “The company's lower price strategy applies not just to its iPhone and iPad products, but also to the MacBook Air-all have been able to meet or beat the prices offered by some of its rivals” (Whitney 2011). Apple has established partnership with other companies, which helped it to spend less money on research and provide innovations. For example, a turning point was when Steve Jobs understood that Macintosh had not only to display letters and numbers, as other computers did, but it also had to reproduce graphics. So he signed a contract with Canon and started the creation of a board which would serve as an interface for two devices, transferring data from Mac to a format for the printer.

“Secrecy was one of the important aspects of his strategic planning and method of coping with competition in the market.”(Stone 2009). The idea of forming a separate team that is isolated from the influence and interference of the rest of the company was well-proved in the case of the Macintosh project, so Steve decided to apply this approach to all future products. In the process of creating iPhone, he paid a lot of attention to safety, making everything possible to ensure that competitors did not know about any project details, design or technology. “Jobs didn't want his iPhone team to be muddled with preconceived notions around the cellphone market and had the team placed in a separate building.” (Qualman 2011). People who worked on antennas did not know what the phone control buttons would be. Those who worked on material for the screen and the body did not have access to information about the software, user interface, icons, and so on.

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3a. Argue and justify in depth why Steve Jobs is different and unique in terms of leadership attributes from other famous corporate leaders from this decade.

There are several characteristics that made Steve Jobs different from other corporative leaders. They are intuition, risk, innovation, visionary, creation of a new corporate culture, perfectionism, attention to details, and self-confidence.

First of all, Steve Jobs was not just a person. “He was a brand. There are very few people who can boast of such popularity.” (Thier 2012). There are many successful businessmen. For example, Richard Branson who is famous for his entrepreneurial skills which were noticed from his early childhood and his huge corporation “Virgin” which provides a large number of services (from airlines to music recording studios), and also his reckless character. He is a successful businessman who has used his intellect and power to get top positions in business. However, he did not become a revolutionary. Steve Jobs changed the world with his innovations, but his company went through both success and failure. “The greater the success was, the bigger the damage was.” (Michael 2009). The eccentric character of Steve Jobs made his personality a brand. Unfortunately, his incredible success reached the highest peak and finished quickly. The paradox of life is that revolutionaries do not live long and have time only for one revolution. The CEO of “Virgin” chose a less quick and innovative approach to business. He did not try to change the world, but he used the base that had already been created in the market and made his profit from successful entrepreneurial skills without creating anything new. So the main feature that differs Jobs from other corporate leaders is his innovative approach to business, a desire to conquer the public by something simple, fashionable, and available to everyone.

The second important feature of Steve Jobs is a special corporate culture of his company. “Organizational culture is the shared beliefs, principles, values, and assumptions that shape behavior by building commitment, providing direction, establishing a collective identity, and creating a community.” (Wooten 2009).In my opinion, nobody has paid so much attention to workers, spirit of the company, and gifted people. He allowed people to discover their talents and creativity. “Apple offers a variety of attractive employee benefits to complement direct wages. The benefits system is used to entice, and retain industry-leading talent to benefit Apple.” (Masi 2009).

Steve Jobs located his office at the entrance, and all other sections and laboratories were located around it in a form of an arc so that Steve was in the center of the workspace. “He was like a conductor in front of an orchestra.” (Elliot 2011). In the atrium, there was a grand piano, video games, and a huge fridge with lots of fruit juice bottles. Thus, the atrium very quickly became a place where employees liked to gather.

“Apple does not show up on Fortune’s 100 “Best Places to Work” list although many of its competitors, including Dell and Microsoft, do.”(McKnight 2012). Apple is also famous for the so called “slavery”. Steve Jobs was a very demanding person. “He was completely involved in the creation of the product, and very often he demanded people to work days and nights, especially before the output of a new product.” (McInerney 2011). He hired only those people who were able to work this way, were devoted to everything the company did, and understood that they were changing the world. No other present company is famous for such an approach.  

3b. Describe in depth how Steve Job executed comprehensive strategic management and put in place the strategic positioning for Apple.  

Executing comprehensive strategic management and implementing the strategic position of Apple, Jobs followed the following principles:

  • Creativity. “Sell dreams, not products.” (Success: "Dream Bigger" 2012).
  • Invest in talents. “He connected the humanities to the sciences, creativity to technology, arts to engineering.” (Isaacson 2012)
  • Think not about today but future.
  • Innovate reality.
  • “Take into account both emotional and functional people’s needs.” (McConnell 2011).
  • Create simply, elegantly, and fashionably. “This is one of those categories that might best be thought of as business model” (Chaffin 2012)

3c. What were the justifications of Steve Job in such comprehensive strategic management and strategic positioning of Apple.

Steve Jobs created a broad differentiation strategy. The company provided services of high-quality, innovative design, and individual approach to everyone. The strategy was oriented to both experienced users and beginners. “To control the firm’s brand image Apple sells through first-party retail establishments and through authorized retailers. Apple Stores act as advertisements for the brand and provide a human point of contact between the firm and its customers. Authorized retailers are held to certain standards to protect Apple’s brand image.” (Kramer 2011). Another strategic step was partnership with OEMs. Apple focused on the design of its products and signed a contract on Apple products manufacturing with OEM in China. This partnership put Apple ahead of other providers. One of the ways to cope with competition is the ability to create highly integrative systems with software designed only for the hardware it runs on. “Apple creates everything for its computer and they do not use details produced by other companies in their products (Dell uses Microsoft Windows).” (Links 2011) Apple has successfully implemented its strategy, but there are still some risks from the external environment. The main risk is the dependence on Chinese partners because they are responsible for manufacturing Apple products. Quality slips of the manufacturing company can negatively affect Apple.

Some policies that Steve Jobs implemented to make his business more competitive and efficient 

  • “Apple redesigned packaging for many of its popular products to be more lightweight and take up less space in shipment.”(Masi 2009). In this way, they reduced costs on transportation.
  • Apple budget includes large cash reserves. This policy allows finding extra money for financing expansion and capital purchases without being dependent on creditors.
  • Apple hires only gifted engineers and experts who meet the company’s high requirements.
  • Apple invented the system of benefits for its employees which inspire them to benefit the company. “Employees are rewarded for experimenting, risk taking, and creativity.” (Wooten 2009).
  • Apple pays more and more attention to innovations, development, and research products. “At Apple, innovation isn't a strategy or a department; instead it's the basic material that goes into everything the company does.” (Wooten 2009).

These fields are the most invested in the company. This policy helps Apple to keep ahead of the competition.

  • Apple protects its innovations by patents. It already has several thousands patents. “Apple believes in the importance of protecting its intellectual capital byfiling patents in the United States and worldwide for its inventions and innovations.” (Masi 2009).
  • “Apple sets up positive relations with its suppliers.”  (Kramer 2011)
  • Apple distributes its production using the services of authorized retailers, which also positively contributes to the company’s image. It helps to establish contact with customers. “Apple.com online orders are shipped directly to consumers from storage facilities in China.” (Stone 2009). It saves money spent on warehouses in America.
  • “Apple’s smartphone and tablet will serve as cornerstones, but the company plans to promote the products in new markets like Brazil.” (NUTS: Apple's CEO Reveals Future Strategy, Google to Expand Into Hardware 2012)

3d. Recommend alternative strategies in event that Apple’s comprehensive strategic management and strategic positioning of Apple can no longer be sustainable for growth.

3e. Argue and justify your recommended alternative strategies.

Apple’s management was very successful due to Steve Jobs. Unfortunately, the management genius died. His death provoked a wave of excitement and the question of what will happen to the company after the death of its leader. To my mind, Apple could not escape the reduction in share prices. Unfortunately, I have a pessimistic forecast about this company. Steve Jobs was not just a person, he was a brand. He implemented special management in the company, created a special organizational structure, and established close and successful relationships with partners. “The company lost its brand personality and leader.” (Hamel 2011). Share prices of the company will decrease and partners may doubt the future success of dealings with Apple. A new CEO should do a great job to keep Apple’s position in the market. “In August, Jobs, his health failing, resigned as CEO and handed off to his long-time lieutenant, Tim Cook. Analysts said the company was in good hands.” (Potter 2011). The only way for the company to keep its positions is to continue Steve Jobs’ management strategies and not to lose his style. In my opinion, some updates of the management are necessary:

  • Expansion of the product diversity. Apple should not concentrate on improvements of the products that have already been released; it should improve existing products. The company should create new devices; for example, it should focus on eBooks or ICar. ICar was “a revolutionary car in the research process of which Steve Jobs was secretly involved” (Thier 2012).
  • The PC market is characterized by strong pressure on prices, which influences the profitability of the company. Apple had always been seen as a company selling niche, high-quality products at high prices.” (Whitney 2011). The way to solve this problem is to support the brand or even create an additional image and innovate. The price of innovations that any other company does not produce will be always reasonable.
  • The conquest of a new market may work. The special management style invented by Steve Jobs may work in other business fields. For example, Richard Branson, a CEO of “Virgin” corporation, succeed in many different fields of business. This will create an additional source of finance.
  • The use of Steve Jobs’ ideas concerning products’ improvements and updates will save Apple’s position for some time.
  • Save values chain and save principles of simple, fashionable, and available products.
  • Enter into exclusive arrangements with Asian partners to avoid competition.
  • Underline in advertising the advantages and opportunities of Apple products. This strategy is very important because many customers have not experienced all the opportunities of the company’s products. This marketing approach will result in the increase of sales volume.
  • To start up extra expert services in Apple stores that will help customers to use all opportunities of Apple products.
  • To control the quality of the manufacturing in OEM.
  • Investments. Idle cash should be used effectively. For example, in the form of investments, it will provide benefits.
  • Convergence devices within the Apple system have the advantage simplicity.
  • The dual-band GSM/CDMA iPhone worldwide. The use of the dual-band chip in the iPhone will make it compatible.

Steve Jobs was a unique person with perfect entrepreneurial skills. He was a visionary and revolutionary. “He has changed the game for entire industries.”(Elkind 2008). After the death of Steve Jobs, Apple is likely to face a lot of difficulties on its way. We can only hope that the end of the exciting career of Steve Jobs will not destroy the company.

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