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Apple's 'You Want This' Innovation Keeps It on Top

By Rachelle Dragani MacNewsWorld ECT News Network
Nov 14, 2012 5:00 AM PT

Apple was named the nation's No. 1 innovative company for the third year in a row, according to a study from management consulting firm Booz & Co.

Apple's 'You Want This' Innovation Keeps It on Top

About 80 percent of the study's participants voted the maker of the iPhone, iPad and iPod into the top spot, ahead of Google and 3M.

The most successful companies use one of three types of innovation strategy, Booz & Co. noted. Apple falls under the "need seeker" category, with its history of introducing first-to-market products and telling consumers what they want. Samsung is more of a "market reader," or a fast follower in the tech industry that releases revamped smartphones and other mobile devices soon after its rivals. Google would be more of the third strategy type, the "tech driver," pushing technology to the public to see what new ideas and applications resonate in the industry.

The 700 global executives, analysts and business leaders that voted in Booz's survey liked Apple's strategy of being the first one to tell consumers what kind of product they want, said Barry Jaruzelski, senior vice president at Booz, in part because it's a model that works over the long run.

"This is less of a comment on one breakout innovative product and more of an acknowledgement that the company has a core capability with their talent, process and decisions to be an innovative company," he told MacNewsWorld.

Sustaining Innovation

That sustained core ability to be innovative is one that is difficult to maintain over time, said Jaruzelski, and it is certainly one that has been called into question recently at Apple. This year, most of the company's new releases have been mild upgrades to core products, such as the revamped iPod, iPad and iPhone, rather than introducing the hottest new gadget. Even its newest product release, the iPad mini, followed in the footsteps of competitors' 7-inch tablet form factors, such as Amazon's Kindle Fire and Google's Nexus 7.

A measure of truly sustained innovation must be viewed with the greater picture in mind, though, said Jaruzelski. When the world's business leaders showed faith in Apple in Booz's latest study, it was because the company has proven that even without introducing a music player or a new smartphone each year, creating the perfect consumer product is always on its horizon.

"It's dangerous to bet against them," Jaruzelski noted. "They have shown a core capability repeatedly over the past decade, whether with a breakout product or incremental upgrades, to have a deep-rooted understanding of the user, and have shown they have insight into the consumer. That is a very powerful capability and it is very hard to create. So, even if one year seems more modest than the others in terms of innovation, the fact that they've proved that ability means they have a pretty powerful arsenal to continue to innovate new products and progress going forward. That might not show up on a balance sheet, but it's there."

Brick-and-Mortar Gold

No matter the opinion on whether Apple's products are innovative, they are certainly selling, according to a report released this week from RetailSails. It revealed that Apple's retail stores in the U.S. generate more cash per square foot than any other brick-and-mortar store.

Apple came in ahead of jeweler Tiffany & Co., earning US$6,050 per square foot, about double Tiffany's $3,017. High-end workout apparel retailer lululemon athletica occupies the third spot on the list. Michael Kors, Vera Bradley and Coach were other luxury brands included in rankings, with Apple being the only tech company to earn a place on the top-10 list.

It's the second consecutive year that Apple earned the top spot, even though the company's retail division has undergone some turnover during the year. Following the departure of Ron Johnson, the previous retail executive who worked with Steve Jobs and is credited with creating sleek, innovative retail stores that are now a must-see destination for Apple fans, the company brought in John Browett from Dixon's to take over the division.

Browett didn't get much of a chance to try his approach at Apple's retail model, however. He was ousted in a reorganization after just 10 months on the job. The fact that CEO Tim Cook was willing to give Browett the boot after such a short time shows he places Apple's brick-and-mortar locations as a high priority at the company, said Jerry W. Sheldon, retail analyst at IHL Group. That prioritizing -- with Apple's characteristic emphasis on customer service and a unique in-store experience -- will continue to dictate Cook's future retail decisions, with hopefully more results similar to RetailSails' latest report, he noted.

"It communicates that he truly values the Apple retail store employees, viewing them not as a commodity, but a true business asset," he told MacNewsWorld. "It communicates that he believes the store experience is paramount at the store, and will continue to place an emphasis on this."

Apple did not respond to our request to comment for this story.

Rachelle Dragani is a freelance reporter based in Brooklyn, NY. She enjoys staying on top of e-commerce deals, reporting on what new gadget is coming your way, and keeping tabs on anyone trying to hack into your info. Feel free to e-mail her at rachelle.dragani@newsroom.ectnews.com.

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