For this discussion, pick one company from Fast Company\'s article, \"The World\

Question

For this discussion, pick one company from Fast Company's article, "The World's 50 Most Innovative Companies." (http://www.fastcompany.com/section/most-innovative-companies-2015). Please select one different than what your classmates choose. Describe the company's business model. What makes it an innovative business model? Do you believe it is a sustainable business model? Why or why not? Name one of the company's competitors. How does their business model differ from the company that you selected? 600 words or more

Explanation / Answer

Apple - Rank 02

Apple is a company which has the highest free cash flow in its industry and when compared to some technological giants like Google, Facebook and Amazon. It has a unique business model which focuses only on a handful of products. They believe in designing their products for providing the best user experience. Thus, they have very few components in their product mix and none of the components are unrelated. Smartphones, tablets, laptops, smart watch, head phones and other accessories and Streaming TV box. For example, take their smart phone. They only have one series of smartphone which is the iPhone which they continually improve to provide different models, the latest being iPhone X. The money they spend on research is less compared to their peers. They are able to create a brand where owning an Apple product is a status symbol. Apple depends on contract manufacturers spread across the globe for assembling their product. This allows them to invest in equipment in others' factories through agreements.

Whether the business model is sustainable or not will depend on external factors like the political scenario. Right now, Apple manufactures most of its products in China and thus has very high margins. Due to political turmoil, the company may not have control on its contract facilities.

Samsung is their competitor.

Their business model differs in a way that they have a huge range in their product mix catering consumers from all income categories. They also have country specific products. Samsung has its own manufacturing facilities spread worldwide.  

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