Introduction The innovation value chain can be defined as a sequential three-phase process that involved idea generation, idea development and diffusion of developed concepts (Morten and Birkinshaw, 2007). In all the three phases, managers are tasked with different responsibilities such as internal sourcing, cross-unit sourcing, external sourcing, selection, development, and companywide spread of idea. All the above tasks form links in the innovation value chain (Morten and Birkinshaw, 2007). It is important to take into consideration the fact that in the innovation value chain, a firm may excel in one of the links.
This becomes the firm’s strongest link in the innovation value chain. In the same perspective, there might be one or more activities that a company struggles with in the innovation value chain (Morten and Birkinshaw, 2007). This becomes the weakest link in the firm’s innovation value chain. Innovation value chain is an important approach to innovation strategies in the organizational setting because it provides managers with an end-to-end view of their innovation efforts (Morten and Birkinshaw, 2007). It also eliminates the habit of importation of innovation practices that may address a part of the innovation value chain but not necessary the one needed in the organization to improve most of its products and services (Morten and Birkinshaw, 2007).
The innovation value chain is an important approach because it helps managers to realize that a perceived innovation strength could turn out to be disastrous and hence a weakness in the value chain (Morten and Birkinshaw, 2007). The purpose of this paper is to explore the value chain at Apple Inc. The specific purpose is to identify the primary and support activities (value chain) that exist in the company.
The organization’s value chain In order to improve the rate of innovation in the company, executives view the process of transforming ideas into commercial outputs as an integrated flow rather than viewing the process of transforming ideas from raw materials to finished goods (Morten and Birkinshaw, 2007). In this regard, the organization’s value chain begins with idea generation. The second phase is conversion of ideas into products that can be accepted widely by the consumers in the market. The third phase is diffusion of products.
Idea generationIdea generation is the primary activity in the company’s innovation value chain. Executives in Apple Inc. understand that idea generation is the basic step towards effective innovation. In this phase, managers explore avenues for generating ideas. Internal sourcing of ideas is evident in the company as managers look first inside their own functional groups or business units for creative ideas and sparks (Morten and Birkinshaw, 2007). Fragments of ideas held by different people in different business units and departments are brought together (Heyne, Boettke and Prychitko, 2010).
This is undertaken through brainstorming sessions where individuals from different business units in the organization come together and exchange ideas. It is important to realize that the centralized structure in Apple Inc. makes it possible for cross-unit collaboration where different units coming together to combine insights and knowledge in the process of developing new products and services (Heyne, Boettke and Prychitko, 2010). After exploring ideas internally, the company turns to sourcing ideas externally by looking for goods ideas from outside the company and outside the industry.
This entails tapping into the insights and knowledge of the customers, end users, competitors, research facilities such as universities, independent entrepreneurs, inventors, investors, suppliers and scientists (Heyne, Boettke and Prychitko, 2010).