Apples Value Chain Analysis - Case Study Example

Competitive Analysis: Value Chain and Balanced Scorecard Name Institution Competitive Analysis: Value Chain and Balanced Scorecard Part A: Critique of the Frameworks Value Chain Analysis Value chain analysis refers to the process through which a firm identifies its primary, as well as support activities critical in adding value to the final product, thus the opportunity to analyse these activities to reduce costs while increasing differentiation. Various researchers have focused on the evaluation of this analysis tool with the objective of understanding its implementation in the real world. One of such researchers is Zhang (2010). In this article, the focus was on the evaluation of the case of Hewlett Packard (HP) under the influence of the value chain. The research article did cover the company profile, role in the value chain, customers, and the value propositions. In the article, the author focuses on generating critical distinction between the primary activities and the support activities. Some of the elements of the primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and service. On the other hand, Zhang (2010) lists procurement, technology development, human resource management, and firm infrastructure as the aspects of the support system, which aid the role of the company in pursuit of competitive advantage. From this perspective, the value chain tends to encompass the whole company in pursuit of competitive advantage and sustainability within the market and industry of operation. From the article, it is essential to note that HP designs inbound logistics with the objective of improving efficiency in the transportation through reduction of the energy use and cost, thus the platform to shift product transport to methods that are more efficient and optimisation of the distribution network. In addition, the company concentrates on cutting its operations costs through removal of the diverse layers of management. The usage of the 3PL model by the company is ideal in the reduction of the fixed costs. Similarly, the company concentrates on the generation and implementation of quality strategies to maximise the marketing and sales. From the support perspective, HP focuses on the usage of the most advanced technology in the course of optimising the relationship with the supply base. In addition, the company did focus on the creation of a unique service in relation to the Adaptive Network Architecture (ANA) with the intention of delivering the ability of managing an adaptive enterprise to its major customers. HP also recognises the influence of the human resources or employees, thus the tendency of creating favourable working environments with the objective of enhancing sustainability. Finally, the institution tends to incorporate six business segments: personal system, imaging and printing, enterprise storage and servers, HP services, Software and HP financial services. These are essential in the course of enhancing effectiveness and efficiency in the delivery of quality products in accordance with the demands and expectations of the target audiences. The framework tends to have various benefits and costs in relation to its application in the context of the real life scenario. In the first instance, value chain tends to be very flexible in the course of analysing the company and competitors within the industry. In addition, the tool is valuable in diagnosing and creating competitive advantages on both aspects of costs and differentiations. Similarly, value chain is ideal in the provision of much deeper understanding of the strengths and weaknesses of the company. On the other hand, there are various costs in relation to the integration of the value chain analysis. For instance, many people and entities tend to express their familiarity with the tool rather than expertise in its application. Furthermore, the scale, as well as scope of the value chain analysis can be intimidating in the course of its application, thus the need to focus on effective understanding of the flexibility of the tool to implement it appropriately. Balanced Scorecard Analysis Balanced Scorecard (BSC) comes out as a management tool, which has the comprehensive obligations to address the business performance while combining both financial and non-financial indicators of the business performance assessment. It is critical to note that the ability to define four perspectives of the BSC is essential in enabling an organisation to achieve its main goal through measurement of those aspects, which are crucial for the fulfilment of the vision and strategy in accordance with the demands and expectations of the target audiences. The four perspectives of the BSC include financial, customer, learning and growth, and internal business. Kocakülâh & Austill (2006) focused on the evaluation of the integration of balanced scorecard in the healthcare organisations. According to this research article, performance of the health system, as well as health organisations proves to be a critical topic in the developed and developing nations, thus the need to enhance the level of study on the topic. From this perspective, implementation of the balanced scorecard will be essential in the course of enhancing or improving the performance levels in the healthcare organisations and subsequent systems within the healthcare sector. Integration of the BSC tends to incorporate four critical stages. In the first stage, there is need to focus on the translation of the vision with the intention of gaining consensus among stakeholders and shareholders. Secondly, there is need to communicate objectives, set goals, and link strategies in pursuit of competitive advantage. Thirdly, it is essential to focus on the generating of the business plan with reference to setting targets, aligning strategy initiatives, allocating resources, and establishing relevant milestones. Finally, there is need to attain the feedback and learning, which incorporates articulation of the feedback, supplying strategic and operating information, and facilitating the learning process (Kumari, 2011). In the course of implementing the tool in the real life context (healthcare organisations), the authors focus on the utilisation of the four perspectives. In the first instance, there is the aspect of the consumer perspective, which demands delivery of high quality innovative care while adhering to the needs and expectations of the patients. Secondly, the financial perspective focuses on the delivery of strong, as well as consistent financial performance in the eyes of the payers and the board of trustees. The learning perspective focuses on gaining recognition as a leader in the developing skills, as well as performance of the employees. Integration of the business perspective relates to the achievement of recognition as the premier provider of the healthcare services within the region and market of interest. There are potential benefits and costs in relation to implementation of the BSC. In the first instance, the tool has the ability to enhance the potentiality of the business entity to realise balanced allocation of resources in accordance with the demands and expectations of the target audiences. Similarly, the tool is appropriate in the course of broadening the vision while enhancing customer relationship management in pursuit of competitive advantage within the market and industry of operation. The tool associates with early risk detection, as well as the platform for driving future value in accordance with the demands and preferences of the consumers. On the other hand, BSC has diverse limitations. In the first instance, implementation or utilisation of the tool demands immense resources, as well as the use of generic type matrices. In other instances, managers have the tendency of using the tool as a control mechanism, thus limiting its effectiveness and efficiency in pursuit of competitive advantage and sustainability within the industry. Part B: Firm Level Analysis Resources relate to the inputs into a firm’s production process such as capital equipment, the skills of the individual employees, patents, finances, and talented managers. Resources come out as the source of the firm’s capabilities. On the other hand, capabilities are the source of the firm’s core competencies, which provide the platform for the realisation of competitive advantages within the market and industry of operation. Core competencies are capabilities, which serve as the source of competitive advantage for the organisation against its rivals. There are various aspects in the course of evaluating the resources, capabilities, and core competencies. One of the most effective approaches is the resource-based analysis. Apple’s Value Chain Analysis In the course of evaluating the competitive advantage and sustainability of Apple, it is essential to evaluate the primary and support activities, which are ideal in the generation of the resources, capabilities, and core competencies. Apple continues to focus on the usage of the digital value chain with the objective of cutting down the traditional value chain in relation to the inbound logistics. Apple has the tendency to work with hundreds of suppliers across the globe, thus the platform for maintaining a highly sophisticated supply-chain management. In addition, it is essential to highlight that more than 92,000 full-time employees execute Apple operations in pursuit of effectiveness and efficiency. From the outbound logistics perspective, it is vital to note that Apple’s net sales through direct, as well as indirect distribution changes amount to 28 and 78 percent respectively. This is because of the obligation of the company to minimise the volume of its inventory relating to cost considerations. Apple has the tendency of selling its products and services through four channels of distribution inclusive of retailers, internal settings, online platforms, and mobile careers. Moreover, the organisation invests effectively on the marketing communication mix with reference to advertising, public relations, direct selling, and events and experiences. In the contemporary society, Apple develops a quality reputation and image with reference to the exceptional quality of customer services during pre-purchase, purchase, and post-purchase phases. These attributes are essential in the course of enhancing its image and reputation in the industry, thus the perfect platform in pursuit of competitive advantage against major competitors. One of the support activities at Apple is the integration of effective human resources management. These strategies play critical roles in the course of aiding the role of product and technology development, as well as the administrative finance infrastructure. In addition, Apple incorporates effective and efficient procurement platform in the course of enhancing the image and reputation of the firm in exploiting appropriate supply chain management. Resource-based View This strategy refers to the match an organisation makes between the internal resources and skills, as well as the opportunities and risks under the influence of the external environments. The resource-based view focuses on the evaluation of the resources and capabilities of a firm with the objective of determining the core competencies in pursuit of competitive advantage (Ulrich, 2014). Apple is one of the growing entities in the contemporary society, which makes it appropriate to consider and evaluate from a resource-based approach. It is essential to determine whether the resources and capabilities of Apple add substantive value in pursuit of competitive edge. In the course of evaluating the resources, this tool is vital in the course of examining tangible and intangible resources. Some of the tangible resources in the case of Apple include effective CEO (Steve Jobs and Tim Cook), software, hardware, suppliers, and retail stores. On the other hand, the institution focuses on the exploitation of the intangible resources such as brand name, cash, customer’s database, unique design capability, innovation capability, and powerful brand image, which are ideal in the course of pursuing competitive advantage. Apple tends to focus on the exploitation or utilisation of unique capabilities in pursuing long-tern sustainability and competitive advantage. Integration of the resources and capabilities has the tendency of enabling Apple to create a competitive edge. From this perspective, unique resources play critical roles in underpinning competitive advantage, thus limiting the potentiality of other organisations to imitate or obtain. On the other hand, core competencies enable Apple to achieve competitive advantage through differentiation. Apple focuses on the exploitation of unique design capability while concentrating on quality, as well as differentiation for a better look in accordance with the demands and expectations of the consumers within the market and industry of operation. Incorporation of the unique design capability provides the platform for Apple to compete effectively and efficiently in the technological industry while adhering to the rules and ethical aspects of competition. Similarly, Apple uses innovation capability to develop and integrate competing strategy. This is through continuous designing of the innovative products while maintaining its reputation from its consumers. Furthermore, Apple invests on the research and development programs, thus the need to utilise extensive knowledge on the consumer expectations and demands within the market and industry of operation. Another essential capability of the company is the integration of the powerful brand image. It is critical to note that Apple has an image, which is highly recognisable in the personal computer industry, as well as the consumer electronic industry. The objective of the company is to aid in the creation of innovative products, as well as satisfaction of the needs of the consumers through generation of high quality services. The brand has the tendency of focusing on simplicity, as well as removal of complexity from people’s lives. Some of the popular innovative creations by Apple include iPod, iPhone, iMac, and OS X. These aspects have been essential in facilitating revolutionising of the industry in accordance with the demands and expectations of the target audiences (Linden, Kraemer, & Dedrick, 2007). In addition, Apple has been capable of using these capabilities, as well as resources in the generation of the core competencies to create competitive advantage and sustainability platforms within the industry and market of transaction. Conclusively, it is essential to note that the resources, capabilities, and core competencies enable Apple to exploit the ability to create their entire software and hardware ecosystem, thus the perfect platform for the realisation of competitive advantage. Apple’s Balanced Scorecard Balanced scorecard refers to a framework, which focuses on the shareholder, internal and learning, customer, and financial perspectives towards the creation of a system of linked objectives, measures, initiatives, and targets. Financial perspective focuses on how to evaluate shareholders while customer perspective refers to how an organisation should appear to the customers (Divandari & Yousefi, 2011). In addition, internal business processes examine what the organisation excels at while learning and growth perspective determines the potentiality of the company to improve and create value. Apple focuses on the usage of the BSC as a tool to plan for the long-term performance or sustainability rather than a device to drive various operational changes. The balanced scorecard concentrates on the strategy to expand discussions beyond gross margin, return on equity, and market share. For the financial perspective, Apple focuses on shareholder value (Gurd & Gao, 2007). On the other hand, in the case of the customer perspective, the organisation concentrates on the market share, as well as customer satisfaction under the influence of the innovative capabilities in accordance with the demands and expectations of the target audience. For the internal process perspective, the Apple’s balanced scorecard concentrates on the generation of the core competencies in pursuit of competitive advantage. Finally, learning and growth perspective focuses on the evaluation of the employee attitudes in pursuit of sustainability while adhering to the demands and expectations of the shareholders (Qin, Atkins, & Yu, 2013). The management tends to prioritise the essence of customer satisfaction, as well as core competencies to aid maximisation of the opportunities while reducing the threats in accordance with the demands and expectations of the target audiences. References Dedrick, J., Kraemer, K. L., & Linden, G. (2011). The distribution of value in the mobile phone supply chain. Telecommunications Policy, 35(6), 505-521. Divandari, A., & Yousefi, H. (2011). Balanced Scorecard: A Tool for Measuring Competitive Advantage of Ports with Focus on Container Terminals. International Journal of Trade, Economics and Finance, 2(6), 472-477. Gurd, B., & Gao, T. (2007). Lives in the balance: an analysis of the balanced scorecard (BSC) in healthcare organizations. International Journal of Productivity and Performance Management, 57(1), 6-21. Kocakülâh, M. C., & Austill, A. D. (2006). Balanced scorecard application in the health care industry: a case study. Journal of health care finance, 34(1), 72-99. Available at http://www.ncbi.nlm.nih.gov/pubmed/18972988 Kumari, N. (2011). Balanced Scorecard for Superior Organizational Performance. European Journal of Business and Management, 3(5), 73-86. Available at http://pakacademicsearch.com/pdf-files/ech/517/73 86%20Vol%203,%20No%205%20%282011%29.pdf Linden, G., Kraemer, K. L., & Dedrick, J. (2007). Who captures value in a global innovation system? The case of Apple's iPod. Qin, S. Y., Atkins, A. S., & Yu, H. (2013). Balanced scorecard approach to evaluate business performance measurement using web tools in e-Tourism. International Journal of Computing Science and Communication Technologies, 5(2), 822-828. Ulrich, D. (2014). The future targets or outcomes of HR work: individuals, organizations and leadership. Human Resource Development International, 17(1), 1-9. Zhang, H. (2010). Research Hewlett Packard through its Value Chain. International Journal of Business and Management, 5(8), p179. Available at http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.453.5743&rep=rep1&type= pdf Read More