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Apple Hamdi 3 - Essay Example

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Value chain analysis is defined by (Jurevicius, 2013), as the process by which a firm establishes its primary and secondary that activities that add to the final product, as well analysing these in the manner in which they increase differentiation or reduce costs.
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Value Chain Analysis of Apple Inc s Value chain analysis is defined by (Jurevicius, , as the process by which a firm establishes its primary and secondary that activities that add to the final product, as well analysing these in the manner in which they increase differentiation or reduce costs.
Inbound logistics: Majority of the components are available from various sources, such as Foxconn in Asia. The firm also delegates the acquisition of raw materials by working with OEM partners. Apple has also automated its receiving systems thus reducing the storage space requirement and facility footprint (Apple Inc., 2013).
Operation: Apple products are free from toxins such as BFR. The products are enclosed in highly recyclable aluminium. The firm also outsources production to the third party OEM partners so as to eliminate the burden of production management. By manufacturing components inside the Company, this eliminates the transaction cost of purchasing them in the market thus optimizing the plant’s utilization. As a result, it results to greater economies of scale. The firm also needs to locate its production units near a cluster of suppliers so as 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 own retail stores globally. Lastly, Apple Inc. has developed economical packaging. This reduces material waste and emissions produced on transit (Apple, 2014).
Sales and marketing: sales and are very crucial in ensuring that a firm sells its products. Apple makes use of both print and electronic media to advertise their 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. So as to maintain its market share, Apple has their own branded stores internationally that assist sell their products (Apple, 2014).
Procurements: Recently, the firm realised 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 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 method of identifying opportunities (Grant, 2010). Apple Inc. can deal high wage rates by outsourcing jobs to the 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 the 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 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 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 creation of a virtual love affair with their 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 run 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 for 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 characterised 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). So as 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 the Playforsure technology to develop its line of music players, which profited minimally (Apple, 2014).
Reference List
Apple Inc. (2013). Retrieved May 22, 2014, from Apple Inc.:
Apple Inc. (2014). Various Press Releases and News Articles. Retrieved May 22, 2014, from
Gardener, B. (2008). Learning From Failure: Apples Most Notorious Flops. [Accessed 22 May, 2014].
Grant, R.M. (2010). Contemporary Strategy Analysis. 7th ed. John Wiley & Sons, p. 239-241
Jurevicius, O. (2013, April 25). Strategic Management Insight. Retrieved May 22, 2014, from Value Chain Analysis: analysis.html
Porter, Michael. (2011). Competitive advantage: creating and sustaining superior performance. New York: Simon and Schuster.
Trade Vibes (2008) Apple Inc Overview. Retrieved May 22, 2014, from Read More
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