Assignment 2: Mergers and Acquisitions

Apple is one of the most popular brands leading and technology companies of today. They are heavily known for their apps and products. Although Apple is a popular brand, they had limited search and discovery features to the App Store. Because of the deficiencies in the search, Apple sought to improve their discovery features. Apple covered the search engine, Chomp in November 2009 to announce their seed funding (Dilger, 2012). Chomp is a search engine designed to find and discover apps for iPhone, iPad and Android. The search engine allowed users to search for apps based on what they did and not by what they were named. Since then, they’ve grown their scope to include not only iPhone apps, but Android apps as well. In February 2012, Apple’s acquisition of search startup Chomp provided a relief to App Store’s app discovery problems (Golson, 2012). Although, Apple hasn’t released a public statement on why it purchased Chomp, and it remains to be seen exactly how Chomp’s technology could change app discovery within the App Store (Bonnington, 2012). It is evident the decision to acquire was made due to Apple’s limited search and discovery features. If someone searched for an app under Apple’s past model, it would take several searches to find a particular App. Chomp, however, allowed a person to search with much greater hint and intent (Bonnington, 2012) and the results provide the seeker exactly what they were looking for. Apple’s search is currently a one step process because of Chomp. Chomp was basically used to recreate Apple’s app store exploration and innovation. Apple usually prefers to make small to medium size acquisitions of talent and technology, rather than spending huge sums of its $100 billion cash hoard (Golson,

Assignment 2: Mergers and Acquisitions

2012). There are claims Apple paid $50 million for Chomp. There are positive effects because of the acquisition. Apple has the most and highest quality apps and ranks top leader in the app ecosystem. Although Apple spent $50 million, Apple has made significant investment in app discovery through its acquisition of Chomp and continuously to be successful because of a more accessible app search. Apple’s acquisition is an investment into a strategic thrust, driving the app ecosystem through better discovery (Warms, 2012). One could also indicate a positive effect of the acquisition could be customer satisfactory because of the new improvements to the search process. Apple does strive on customer satisfactory and quality products. This could have played a major role in the acquisition.
The research did not access Chomp’s organizational structure. However, it did mention an employee group of 20. Apple has over 60, 000 employees and of course Chomp integrated itself into Apple’s corporate structure and began work on only iOS-related functionalities. Apple's organizational structure is built off simplicity. According to a CNN review, there aren’t any committees at Apple, the concept of general management is frowned on, and only one person, the chief financial officer is responsible for costs and expenses that lead to profits or losses (Lashinsky, 2011). They do not practice general manager structure, but focus only on a few things at a time. The six key elements of an organization’s structure are: Work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. Although Apple illustrates a non- structure organization, Apple’s Organizational structure begins with the Board of Directors who oversees the Chief Executive Officer and other senior management in the competent and ethical operation of
Assignment 2: Mergers and Acquisitions

Apple on a day-to-day basis and assures that the long-term interests of shareholders are being served. The organization has to include separate departmental structures because Chomp’s new role within the organization. Apple’s desire to constantly improve products and quality of services lead them to acquire Chomp. Since Chomp, was a smaller company with less employees, they were less likely to turn down the opportunity work for Apple. Apple’s organization structure is one of its most closely protected secrets. Even Apple’s employees have little to no idea of how the company is organized. There probably were changes in the human resource management practices for Chomp since they were a smaller group. Chomp probably adapted to the practice of Apple’s human resource management and made the necessary adjustments. Since Apple acquired Chomp, Apple’s HR's most likely prepared the company for integration, lead the decision processes, and executed the transaction. It is obvious one of the leading companies in technology products and services would take control of the transaction during the acquiring process. Apple is said to have the attitude of “Who doesn’t want to work for Apple?”

References

Bonnington, C. (2012). How Apple’s Chomp acquisition could change your app store experience. Retrieved from http://www.wired.com/gadgetlab/2012/02/chomp-apple-app-store/ February 17, 2014.
Dilger, D. (2012). Apple acquires Chomp app search engine to enhance App Store. Apple Insider Retrieved from http://appleinsider.com/articles/12/02/23/apple_acquires_chomp_app_search_engine_to_enhance_app_store February 17, 2014.
Golson, J. (2012) Apple acquires chomp to recreate app store search and discovery. Retrieved from http://www.macrumors.com/2012/02/23/apple-acquires-chomp-to-recreate-app-store-search-and-discovery/ February 17, 2014.
Lashinsky, A. (2011). How Apple works: Inside the world's biggest startup. Retrieved from http://tech.fortune.cnn.com/2011/08/25/how-apple-works-inside-the-worlds-biggest-startup/ February 17, 2014.
Warms, A. (2012). What Apple’s acquisition of Chomp means for the global app ecosystem. http://www.appolicious.com/tech/articles/11182-what-apples-acquisition-of-chomp-means-for-the-global-app-ecosystem February 17, 2014.