Apple Value - Chain - Essay Example

22 Feb. 12 Apple Inc. - Value Chain Value chain of a company comprises of all the integral operations of the company. The concept of Value Chain was first introduced by Michael Porter who provided insight that the company utilizing value chain is aimed to provide maximum value in the lease possible cost. Nowadays, companies are very well aware of the fact that due to increased level of competition, buyers have power more than ever before. Therefore to achieve a greater advantage, companies add additional value to their products and services.

Value chain can be in the form of better customer service, improved products or fastest delivery. One of the companies utilizing value chain in an exceptionally effective manner is Apple Inc. In subsequent paragraphs, the different components of Apple Inc.’s value chain are briefly discussed. Components of Value Chain Value chain is based upon the following fundamental constituents, which are: Infrastructure of the firm Apple has control over alternative, hardware and software. Apart from IBM, Apple Inc.

practice both vertical and horizontal integration to a much greater extent than any other PC manufacturer. Apple has edge in not only manufacturing the design and chassis of computer systems, but also the operating systems and software. Human Resource Management The HR department of Apple has moved from quality orientated to quantity orientated. Apple has changed its strategies for HR department in way that it contributes to the quantifiable benefits to the company. For instance, instead of setting a mission like “We value our assets (people)” it has changed it to “We offer exciting environment which provoke one’s personal involvement and stimulates creativity”.

Technological Development Even though it has continued to be dependent on Independent Software Vendors (ISVs), Apple has developed its own software for its products like Mac. Such moves caused Apple to a substantially high development cost. In order to support the growing lines of Macintosh products, Apple has developed its own applications and software. In technological advancement, Apple has no other major competitor. Procurement Some of the company’s raw materials are available through number of sources but others are procured only through limited selected suppliers.

Apple has reliance on small suppliers and it also encounters issues like price fluctuation Inbound Logistics Apple has its suppliers in two categories, one who make operating system and microprocessor and second who manufacture products like keyboards, disk drives and memory chips. Products in the first category are supplied by Microsoft and Intel and products of the second category are available in highly competitive prices. Operations Under the reign of Steve Jobs, Apple’s operations have been improved tremendously.

From the production of PCs, it has now reached the stage where its Macintosh product line is distinct in the eyes of consumers from every other product. Outbound logistics Apple provides its products to its customer through its retail outlets which are located in every major country. It has its outlets in United Kingdom, Canada, China, Italy, Australia and Japan. All over the world it has approximately 215 outlets which have highest number of visits than any other store which is about 350 million visits in 2008.

Marketing Apple’s retail strategies are considered as the most effective among all. It had opened its first store in 2001. Since then, it has now 215 stores in the major countries of the world which generate about 19% of the total revenue. These retail outlets have boosted the sales of Apple’s Macintosh line. After sales services Apple’ product iPod has “halo effect” on its other products and it boosted up the sales of its other Macintosh products. Apple’s products provide customer with so great experience that these products become the integral part of customer’s lifestyle.

In case of any queries, after sale services are provided at the Apple’s retail outlets. References Yoffie, David B. And Slind, Michael, Apple Inc, 2008. 8 September 2008. Web. 22 February 2012.