Value Chain of an Apple Incorporated - Essay Example

Apple products are free from toxins such as BFR. The products are enclosed in highly recyclable aluminum. The firm also outsources production to third-party OEM partners to eliminate the burden of production management. Manufacturing components inside the Company eliminates the transaction cost of purchasing them in the market thus optimizing the plant’s utilization. As a result, it results in greater economies of scale. The firm also needs to locate its production units near a cluster of suppliers to reduce the costs of purchasing and distribution (Apple Inc., 2013).
Outbound logistics: Apple needs to use a variety of direct and indirect distribution channels. The electronic Company is improving its capacities for distribution by increasing the number of its retail stores globally. Lastly, Apple Inc. has developed economical packaging. This reduces material waste and emissions produced in transit (Apple, 2014).
Sales and marketing: sales are very crucial in ensuring that a firm sells its products. Apple makes use of both print and electronic media to advertise its products. Apple can make use of radio, television, and newspapers, as well as online marketing tools such as Facebook and Twitter to increase its scope of customer reach. This saves the cost of rent or salespeople at the stores.
As part of its marketing strategy, the firm has entered into patent cross-licensing and also technology agreements with Microsoft. This was after years of unimpressive growth in market share. To maintain its market share, Apple has its own branded stores internationally that assist sell its products (Apple, 2014).
Procurements: Recently, the firm realized that outsourcing the raw materials; core ingredients in the manufacture of a product that already exists in the market may be considered as a step towards gaining a competitive advantage by Apple Inc (Apple, 2014).
Human resource management: the firm has been offering training and development to its suppliers along with the employees equipping them with both academic skills (Apple, 2014). Cost reduction can be used as a method of identifying opportunities (Grant, 2010). Apple Inc. can deal with high wage rates by outsourcing jobs to low-wage nations and improving its speed of production, along with installing automated processes in the production cycle.
The firm’s infrastructure: the firm has a diversified workforce that is guided by Apple’s code of conduct. This ensures efficiency and improves productivity (Apple, 2014).
Technology: The other major element in the Apple value chain analysis is the research and development section. Apple Inc. can further improve its technology to offer the firm a competitive advantage against the other product and service offerings to the market. Technology represents the core of Apple’s capability. Apple’s history is rich with the development of cutting-edge technology. Apple’s operating system is considered as the most stable and reliable (Apple, 2014).
Customer service: Apple has been able to maintain its substantial cash reserves through the creation of a virtual love affair with its customers by offering superior products such as iPods and other MP3 players. The firm also needs to aggressively pursue software and hardware updates. Apple has effectively integrated its primary activities making them transparent to the consumers. For example, Apple developed software that runs on Windows XP for its new Intel-based iMac and then posted it online free of charge for the iMac users (Apple, 2014).
Services: Apple offers repair and maintenance services for its products. This not only enhances customer satisfaction but also creates a good relationship between the firm and the client. Besides, all Apple products have warranties that cater to damage in case of product failure (Apple Inc., 2013). These services ensure that the customers are supported after purchasing the product (Grant, 2010).
Legal services: the firm deals in a market that is characterized by change and innovation (Porter, 2011). As a consequence, the drive to expand product and service offerings may be subject to claims of patent and copyright infringements (Grant, 2010). To address such claims, the firm needs to have an effective legal department in safeguarding intellectual property.
Apple failed when it partnered with Microsoft, its major competitor (Gardener, 2008) in the acquisition of Playforsure. Microsoft designed an ideal media player that was costly for the market. Apple used Playforsure technology to develop its line of music players, which profited minimally (Apple, 2014). Read More