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Apples Value Chain Analysis: The Global Supply Chain

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Question:

Describe about the Report on Apples Value Chain Analysis for The Global Supply Chain?

 

Answer:

Introduction

The term ‘value chain’ mainly refers to the set of activities on the basis of which a company working in a particular industry can avail a competitive benefit to create the shareholder value. The concept of value chain was first introduced by Michael Porter which is at present is increasingly used by various firms to deliver valuable service or product in the market. It mainly comprises of five chain of activities mentioned below:

Operations

Inbound Logistics

Sales and marketing

Outbound Logistics

Service

These activities are not segregated from each other but affect the activity of one another (Jack M Wilson 2013).

Supply Chain Management (inbound logistics at Apple)

Apple is known for its design and innovation. Its supply chain model has occupied the top rank in the industry and mainly works in the following ways:

Concept testing: It mainly includes conducting market research, conducting product diagnosing, assembling of data cost and identifying possible quality defects.

R and D: It is based on developing latest technologies, acquiring the business of third party and acquisition of intellectual property licensing.

Launch: It mainly emphasizes on resolving backlogs and making demand forecast till the period of 150 days.

Quarterly Review: It usually focuses on reviewing inventory level, adjusting the forecast of demand, checking the status of the life cycle of the products, updating the status of latest product development, monitoring current levels of sales and trends of component costs (CS Canada 2013).

Pre launch: It basically involves managing issues of production ramp, providing software to latest products, managing commitments of material purchase, raising of orders, determining launch quantity, providing proper levels of inventory and making prepayments to the suppliers.

The supply chain activities of Apple not only ensure product quality but also make sure it caters to the requirements of the customers. But at the same time because of these chain of supply activities Apple can face problem in the global market in the event of any economic turmoil.

Strength

It helps Apple to focus on manufacturing world class products using innovative approaches.

It replaces the requirement of innumerable warehouses with the centralized location of California.

Weakness

It can affect the company during the time of economic turmoil.

Company is entirely dependent on its outsourcing partners for the supply of logistical services.

Operations 

Operational management in Apple is mainly based on the following sub-heads mentioned below:

Quality management

Design of services and goods

Capacity design and process

Layout strategy and design

Location strategy

Human resources and job design

Inventory management

Management of supply chain

Maintenance and

Scheduling

These operations management of Apple evaluate and monitor productivity through different criteria. Diverse activities and global size of the firm are translated to various benchmarks, criteria and standards fort productivity in various commercial areas of the company (IMANET n.d.). Certain productivity criteria in the operational management of Apple are:

Productivity of the Apple stores

Productivity of the Apply supply chain and supplier

Productivity of every employee of the Apple for developing product.

It is due to this operational management that Apple has been successful in setting high standards for its products in the market. However, it is because of this operational management it has failed to attract shareholders as it is not ready to share its chunk of its vast revenues with them (Descartes 2014).

Strength

Helps to maximize the capacity of the workforce to design and develop products.

It helps in effective control and tracking of the products of the company.

Weakness

It prevents the entry of outsiders into its operating system.

Not friendly with the share holders.

 

Outbound Logistics 

Outbound Logistic activities of the company mainly involve storing the finished products in various warehouses and then distribute it in different corners of the world through third party vendors. With the help of this activity it has been easier for the company to store the bulk of its products ranging from iPhones, iPads, and so on in a safe and secured condition and then on the basis of demands these items are released in certain stocks to satisfy the demand of the customers.

Strength

It helps in smooth accessibility of products to the common users.

Enables company to know about the latest choice of the customers.

Weakness

It makes firm entirely reliant on the third party vendors to ensure proper distribution of its products.

Sometimes there is mismatch between ground reports and actual facts.

Sales and marketing

The marketing mix of Apple mainly denotes how the firm matches its commercial activities as per the condition of the market. It focuses on promotional activities which mainly include:

Personal selling

Advertising

Public relations

Sales promotion

It uses optimum pricing strategy to sale its products. Though this ultimately involves heavy price of the products but it helps in maintaining the high standard of the firm along with its products. The major benefit of this strategy is that the firm is able to occupy the smaller market share comprising of upper middle classes only. The major disadvantage of such strategy is during any financial crisis it will be hard for it to shift its products to the market of lower income people (IIMB 2014).

Strength

It helps in developing brand awareness among the customers.

It helps in reaching before the target segment of customers much easily.

Weakness

It can have a disturbing effect on the customers burdened with office works.

Excessive advertisement can take a toll on the image of the company.

 

References

Jack M Wilson 2013, Apple –The Global Supply Chain, retrieved on 4th February 2016 from https://www.jackmwilson.net/Cases/Case-Apple-Supplychain.pdf
 
CS Canada 2013, A Strategic Analysis of Apple Computer Inc. & Recommendations for the Future Direction, retrieved on 4th February 2016 from https://www.cscanada.net/index.php/mse/article/viewFile/j.mse.1913035X20130702.Z001/4304`
 
SERC 2014, The Analysis of Strategic Management of Samsung Electronics Company through the Generic Value Chain Model,
 
retrieved on 4th February 2016 from https://www.sersc.org/journals/IJSEIA/vol8_no12_2014/12.pdf
 
Merage 2011, Capturing Value in Global Networks: Apple’s iPad and iPhone, retrieved on 4th February 2016 from https://pcic.merage.uci.edu/papers/2011/value_ipad_iphone.pdf
 
IMANET, Value Chain Analysis for Assessing Competitive Advantage, retrieved on 4th February 2016 from https://www.imanet.org/docs/default-source/thought_leadership/management_control_systems/value_chain_analysis_for_assessing_competitive_advantage.pdf?sfvrsn=2
 
Descartes 2014, retrieved on 4th February 2016 from https://www.descartes.com/content/uploads/il_digital_june2014.pdf
 
IFIP, Transforming Supply Chains in Digital Content Delivery: A Case Study in Apple, retrieved on 4th February 2016 from https://dl.ifip.org/db/conf/ifip8/confenis2007-2/NathSS07.pdf
 
IIMB 2014, Supply Chain Management: Value Chain and Value Network Logics, retrieved on 4th February 2016 from https://www.iimb.ernet.in/docs/scmc-papers/Viqar%20Ali%20Baig.pdf
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