Apple Value Chain Analysis •
The more more value an organization organization creates, creates, the more more proftable proftable it is likely likely to be. And when you provide more value to your customers, you build competitive advantage.
• •
Understanding how your company creates value, and looking or ways to add more value, are critical elements in developing a competitive strategy. Michael orter discussed this in his in!uential "#$% book &'ompetitive Advantage,& in which he frst introduced the concept o the value chain.
• •
A value chain is a set o activities that an organization carries out to create value or its customers. orter proposed a general(purpose value chain that companies can use to e)amine all o their activities, and see how they*re connected. The way in which value chain activities are perormed determines costs and a+ects profts, so this tool can help you understand the sources o value or your organization.
https--www.mindtools.com-pages-article-newT/011.htm
A value chain is chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product product or or service for the market market.. The concept comes from business management and was first described and popularized by Michael Porter in in his 19! best"seller# Competitive Advantage:: Creating and Sustaining Superior Performance .$1% Advantage The idea of the value chain is based on the process view of organizations# the idea of seeing a manufacturing &or service' organization as a system# made up of subsystems each with inputs# transformation processes and outputs. (nputs# transformation processes# and outputs involve the ac)uisition and consumption of resources * money# labour# materials# e)uipment# buildings# land# administration and management. +ow value chain activities are carried out determines costs and affects profits. — IfM, Cambri Cambridge dge$,%
The appropriate level for constructing a value chain is the business unit# unit# $!% not division division or or corporate level. Products pass through a chain of activities in order# and at each
activity the product gains some value. The chain of o f activities gives the products more added value $!% than the sum of added values of all activities.
References $edit edit%% 1.
- ump up to/
a b
- ump up to/
a b
Porter, Michael E. !"#$%. Competitive Advantage: Creating and Sustaining Superior Performance. Performance. &e' (or).: Simon and Schuster. *etrieved " September +!-.
,.
/ecision Support 0ools: Porter1s 2alue Chain . Chain . Cambridge 3niversit4: Institute for Manufacturing IfM%. *etrieved " September+!-.
0.
- ump up to/ Michael . Porter &19!' 2ompetitive advantage/ creating and sustaining superior performance. The 3ree Press a b
I nt er nat i onal pr oduc t i on,t r adeandi n ves t ment sar ei nc r e as i ngl yor gani s edwi t hi nsoc al l edgl obal v al uechai ns ( GVCs )wher et hedi ff er en ts t agesoft h epr oduc t i onpr oc es sar el o ca t edac r os sdi ff er e ntc ount r i es .Gl obal i s at i on mot i v at escompani est or es t r uc t ur et hei roper at i onsi nt er nat i onal l yt hr oughout s our c i ngandoff shor i ngofac t i v i t i es . Fi r mst r yt oop t i mi s et h ei rp r oduc t i onp r o c es s esb yl oc at i ngt hev ar i ousst agesa cr os sdi ff er ents i t es .Thepas t dec ad esha v ewi t nes s edas t r on gt r endt o wa r d st hei nt er nat i onal di s per s i onofv al uec hai nac t i v i t i e ss uc ha sdes i gn , pr oduc t i on,mar k et i ng,di s t r i but i on,e t c .
https--www.oecd.org-sti-ind-global(value(chains.htm
(f you are searching for a way to gain an edge on your competition# consider one of the business world4s most valuable tools/ the value chain analysis. 5alue chain analysis relies on the basic economic principle of advantage 6 companies 5alue compa nies are best served by operating in sectors where they have a relative productive advantage compared to their competitors. 7imultaneously# companies should ask themselves where they can deliver the best value to their customers. To conduct a value chain analysis# anal ysis# the company begins by b y identifying each part of its production process and identifying where steps can be eliminated or improvements can be made. These improvements can result in either cost savings or improved productive capacity. The end result is that customers derive the most m ost benefit from the product for the cheapest cost# which improves the company4s bottom line in the long run. Advertisement
What is a value chain? To understand how to conduct a value chain analysis# a business must first know what its value chain is. A value chain is the full range of activities 6 including design# production# marketing and distribution 6 businesses go through to bring a product or service from conception to delivery. 3or companies that produce goods# the value chain starts with the raw materials used to make their products# and consists of everything that is added to it before it is sold to consumers. The process of actually organizing all of these activities so they can be properly analyzed is called value chain management. The goal of value chain management is to ensure that those in charge of each stage of the value chain are communicating with one another# to help make sure the product is getting in the hands of customers as seamlessly and as )uickly as possible.
Porter's value chain +arvard 8usiness 7chool4s Michael . Porter was the first to introduce the concept of a value chain. Porter# who also developed the 2ive 2orces Model Mo del that many businesses and companies use to figure out how well they can compete in the current marketplace# first discussed the value chain concept in his book 'ompetitive
Advantage 'reating and ustaining uperior erormance erormance &3ree Press# 19!'.
2ompetitive advantage cannot be understood by looking at a firm as a whole# Porter wrote. (t stems from the many discrete activities a firm performs in designing# producing# marketing# delivering and supporting its product. ach of these activities can contribute to a firm4s relative cost position and create a basis for differentiation According to 3earnMarketing# Porter suggests that activities within an organization add value to the service and products that the company produces# and that all of these activities should be run at optimum level if the organization is to gain any real competitive advantage. (f they are run efficiently# the the value obtained should sh ould e:ceed the costs of running them 6 for e:ample# customers should return to the company and transact freely and an d willingly.
http/;;www.businessnewsdaily.com;!<="value"chain"analysis.html
Val uec hai nanal y si si st hepr oc es sofl ook i ngatt heac t i v i t i est hatgoi nt oc hangi ngt he i nput sf orapr oduc tors er v i c ei nt oanout putt hati sv al uedbyt hec us t omer . Readmo mor e:TheBa s i c sOfVa l u eCh ai nAn al y s i s| I nv es t opedi aht t p: / / www. i nv es t opedi a. c om/ ar t i c l es / i nv es t i ng/ 111014/ bas i c sv al uec hai na na l y s i s . a s p# i x z z 4PKOz q Lo j Fol l o wu s:I n v e s t o pe di ao nFa c eb oo k
Val uec hai nanal y si si sdes i gnedt oi mpr ov epr ofi t sbycr eat i ngapr oduc tors er v i c et hati s s os uper i ort hatc us t omer sar ewi l l i ngt opa ymor et hant hec os tt oc r eat ei t . Readmo mor e:TheBa s i c sOfVa l u eCh ai nAn al y s i s| I nv es t opedi aht t p: / / www. i nv es t opedi a. c om/ ar t i c l es / i nv es t i ng/ 111014/ bas i c sv al uec hai na na l y s i s . a s p# i x z z 4 PKP6 r KU2 Fol l o wu s:I n v e s t o pe di ao nFa c eb oo k
Rat her ,ac ompan ys houl ddec i dewh yi twant st oi mpr o vei t sv al uec hai ni nt hec ont e xtofi t s c ompet i t i v eadv ant age-howwoul dt hec ompan yl i k et odi ff er ent i at ei t s el famongs ti t speer s . T wocommonc ompe t i t i v eadv a nt ages t r at eg i esi nc l udel o wc os tpr o vi deror s pec i al i z at i on/ di ffer ent i at i onofpr oduc tors er v i c e. •
•
L owCo s tPr o v i d er v a l u ec h ai na na l y s i sf o c us e sonc o s t sa ndh owac o mp mp an yc an r educ et hos ecos t s . Spec i al i z at i onv al uec hai nanal y si sf oc us esont heac t i v i t i est hatc r eat eauni que pr oduc tordi ffer ent i at i oni ns er v i c e.
Readmo mor e:TheBa s i c sOfVa l u eCh ai nAn al y s i s| I nv es t opedi aht t p: / / www. i nv es t opedi a. c om/ ar t i c l es / i nv es t i ng/ 111014/ bas i c sv al uec hai na na l y s i s . a s p# i x z z 4PKPN9 i Yh Fol l o wu s:I n v e s t o pe di ao nFa c eb oo k
Apple has completed thirty years in the market. (t has been one heck of ride for organization. This thirty year >ourney has been full of ups and downs. And that4s pretty obvious with innovative organization like Apple. ?eader of this organization 7teven obs has been responsible for Apples rapid progress. 7everal successful products have been launched by Apple. 8ut on several occasions they had to bare huge losses. Apple was struggling badly to survive during 199<"199=. @ithin 10 years share value of apple rocketed through skies and ,1 was miraculous for Apple as share value of Apple went ahead of Microsoft. This has been fairytale to say the list. &7ingh et al# ,9' pple rightly gives all the credit to its ipod in single year of ,! y 0, million ipods were sold figure like these never been herd before. &Briffin# ,=' 5alue chain analysis played important role in Apples progress. Apple never played pioneer in the market they always have been e:cellent second movers in the market. Apple always tries to find drawbacks in other products and then they tend to introduce their product which is free from these drawbacks. &Brant# ,!' 3or e:ample# in earlier days there were e:cellent music players available in the market but they all lacked one important factor that was portability. People ware not comfortable using products with limited facilities like walkman. &+aberberg C Dieple# ,' People were looking for a portable music player with considerable storage capacity and e:cellent music )uality. Apple ipod satisfied all those needs# it was a portable music player with e:cellent music )uality and large storage capacity. Eo wonder sell of ipod broke all records and had earth shattering following. &Farki# ,' @e can also see brilliant use of value chain analysis incase of Apple when they provide substitution for their own products. Apple introduces such a wide range of products# because of thisG possibility of consumer moving towards other products gets reduced considerably. &Monczka# ,9' Apple is did e:ceptionally well in value chain analysis due to factors mentioned belowG (nbound logistic# where primary operations are controlled which includes activities like# receiving the materials from suppliers# storage of this material and the way it is handled inside any organization. Hperations# in this section process related to production and services are handled. Apple gains loads of ground in this factor. (n case of apple production and services are so complicated and vast in nature that many subdivisions are created for distribution of work. &Apple (nc. 7trategic Management Analysis# ,' Hutbound logistics# where end product is provided to common users# distribution system of any organization should be e:cellent to do better in this department
&Brimm# ?ee# C 7mith# ,<'. (n this sector Apples stores which are devoted only for Apple products are e:cellent e:amples. @here not only distribution system is up to mark but product monopoly also plays its part. 7ales and marketing# Apple score heavily in these sectors because of their aggressive campaigning# slick looking products# creating heavy buzz in the market during launch of new product# and long range of products. Apple always has been seen innovating new products according to user4s re)uirements and to understand re)uirements of users in authentic manner Apple consistently carried out some rigorous market surveys# made accurate predictions# and then produced products which fulfilled consumer4s re)uirements. &Martin# ,9' 2omplete service# complete service always has been forte of Apple where they have certain provisions which work e:cellently for their growth such as user have to use Apple software if they are using any Apple gadget. This not only develops product monopoly but also increases products base and increases consumer4s loyalty. &@ood C Murphy# ,,'
7tore for only Apple products Apple always has been troubled by big bo: staffers# due to this Apple always found it difficult to introduce or demonstrate new and uni)ue products which were different from the e:isting crowd in the market. Eeed to deal with this problem introduced concept of 7tore for only Apple products where products are only devoted to Apple. Apple could introduce any product according their convenience in these stores. https--www.ukessays.com-essays-marketing-analysis(o(apple(according(to(value( chain(analysis(marketing(essay.php
Apple is famous for innovation and design. 8ut few people know that the way Apple handles inventory is also a factor that led to success. As a matter of fact# research firm Bartner ranks AppleIs 7upply 2hain as the best supply chain in the world every year from ,1 to ,10. Tim 2ook# the current 2H of Apple# a company that reached 1=.9 billion in revenues last year# was before the companyIs 2hief Hperations Hfficer. +e had >oined Apple in 199# the same time 7teve obs re"entered the company# and he transform AppleIs messy operations into a success# becoming 2HH in ,! and 2H in ,11. Tim 2ook believes that when it comes to technology such as smartphones# tablets and laptops# inventory deprecates very# very )uickly# losing 1",J of value each week " Kinventor4 is fundamentall4 evil L he says. (ou )ind of 'ant to manage it li)e 4ou1re in the dair4 business. If it gets past its freshness date, 4ou have a problem.
A comparison of how tech companies managed their inventory in ,11 shows Apple was performing much better than ell# +P# 8lackberry &D(M' and Motorola. Nsing the (nventory Turnover formula that shows how many times a companyIs inventory can be sold and replaced over a specific time period &so the higher the number the better'# in ,11 Apple performed , times better than ell# ! times better than +P# O.! times better than 8lackberry# and !.! times better than Motorola. (n uly ,11# Apple sold every ipad , it could make# creating no wastage with unable to sell inventory. (n its recent )uarterly reports# Apple introduced a bit more details on their inventory/ in 1 ,1O Apple had Q,.1 billion in inventory &a good number compared to Q1= billion of sales in fiscal year ,10'# split in Q1.< billion in finished goods and Q!,! million in components. And they are planning again to not have any inventory unsold in time. Also according to reports# Apple e:ited the 1 ,1O with inventory almost in balance with demand for both the iPhone as well as the iPad# unlike last year when the iPhone ! and the iPad mini were highly supply"constrained.
+ow does Apple run its supply chain operationsR (n a nutshell# Apple purchases components and materials from various suppliers# then gets them shipped to the assembling plant in 2hina. 3rom there# products are shipped directly to consumers &via NP7;3ede:' who bought from Apple4s Hnline 7tore. 3or other distribution channels such as retail stores and other distributors# Apple keeps products at lk Brove# 2alifornia &where central warehouse and call center are located' and ships products from there. At the end of product4s life# customer can send products back to nearest Apple 7tores or dedicated recycling facilities.
+ow did Apple manage to have such a great inventory managementR Tim 2ookIs mantra was from the very beginning to slash inventory# cut down on warehouses and make suppliers compete between themselves. 5hen Coo) initiall4 too) over Apple1s suppl4 chain, he cut do'n the number of component suppliers from ! to +6, forcing companies to compete for Apple1s business, writes 7an Hliver from Apple (nsider# 7e 8Coo)9 also shut do'n ! of the !" Apple 'arehouses to limit overstoc)ing, and b4 September of !""# inventor4 8stoc) on hand9 'as do'n from a month to onl4 si da4s.
(n ,1,# Apple was said to turn inventory every ! daysS And that was part of the reason the research firm# Bartner# placed AppleIs supply chain the best in the world# with ell and 7amsung ranking ne:t in the electronics category# turning their inventory apro:. every 1 days# respectively ,1 days.
Feeping as little inventory on hand as possible is very important. @hyR 8ecause of costs with warehouses and competitors possible hits. Technology manufacturers canIt afford to keep too many products in stock because a sudden announcement from a competitor or a new innovation could change everything and suddenly bring down the value of products in inventory. 8y ,10# Apple was dealing with 1!O key suppliers &way lower than Amazon for e:ample'# which facilitates better supplier relationships' and kept only one central warehouse in perfect data sync with the apro:. ,! owned stores. 3oreseeing sales levels accurately and not having e:cess inventory is absolutely crucial in the computer industry# especially when new products )uickly cannibalize the old. Eot having too many 7FNs helps correct forecasting &in ,10# Apple had ,<. 7FNs# way less than other technology manufacturers'. Another facilitating factor is having a longer product life cycle and Apple has more than 1, months for its key products. And forecasting demand doesnIt come only in the form of what products your customers will buy# but also on what kind of technologies will be in demand for the ne:t coming years# allowing the company to reduce costs with suppliers by placing orders for longer term. This also leads to creating enough demand for suppliers# so that other competitors cannot order the components and hence limiting imitations. Although Apple was always pushing to have fast inventory turnover# it made a change in ,11 of not rushing selling. The change was implemented with the launch of the ipad , and consisted of selling the much"awaited products the second day after they were delivered to shops# despite the customer )ues in front. This measure was taken to make sure inventory tracking runs smooth and there are no errors to lead to inventory inaccuracies. (f you are manufacturing or distributing electronics# you might have something to learn from the above. @e are also curious to hear your stories tooS 2ontact clara $at% tradegecko.com if you want your story to be covered here. https--www.tradegecko.com-blog-apple(had(the(best(supply(chain(in(the(world(or( the(last(our(years(here(is(what(you(can(learn(rom(it
Apple Inc., Statement of Financial Position, Inventory U4 5 in millions
(nventories ource 6ased on data rom Apple 7nc. Annual /eports ource www.stock(analysis( on.net
Sep 24, 2016 ,#10,
Sep 26, 2015 ,#0O9
Sep 27, Sep 28, Sep 29, Sep 24, 2014 2013 2012 2011 ,#111 1#=
'opyright 8 9:"1 tock Analysis on ;et
(nventory turnover measures how fast the company turns over its inventory within a year. (t is calculated as cost of goods sold divided by average inventory. Apple (nc4s cost of goods sold for the three months ended in Sep. 2016 was $29,039 Mil. Apple (nc4s average inventory for the quarter that ended in Sep. 2016 was $1,982 Mil. Apple (nc4s inventory turnover for the quarter that ended in Sep. 2016was 14.66.
http--www.guruocus.com-term-7nventoryTurnover-AA3-7nventory(Turnover-Apple( 7nc
http--csimarket.com-stocks-single<=ciencyit.php>code?AA3
Apple @alue 'hain Analysis osted on March 7, 2!" by #ohn $u%ovs&iy
Value-chain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the business. Figure 1 below illustrates the essence of value chain analysis.
Figure 1 Apple Value Chain Analysis
Primary Activities Inbound logistics. Apple works with hundreds of suppliers around the globe and maintains a highly sophisticated supply-chain management as illustrated in Figure below. Apple!s purchase commitments typically cover its re"uirements for periods up to 1#$ days%1&. C'( )im Cook is known for his strategy of getting suppliers to compete with each-other and he has reduced the numbers of suppliers considerably after becoming C'( in $11.
Figure 2 Apple’s supply-chain management %& Operations. Apple operations are divided into the following reportable operating segments* 1.
Americas
.
'urope
+.
,reater China
.
apan
#.
Rest of Asian /acific
0.
Retail Apple operations are conducted by 20$$ full-time e"uivalent employees and an additional 2$$ full-time e"uivalent temporary employees and contractors. 3a4ority of Apple!s 5hardware products are currently manufactured by outsourcing partners that are located primarily in Asia. A significant concentration of this manufacturing is currently performed by a small number of outsourcing partners2 often in single locations6%+&. Outbound logistics. Apple!s net sales through its direct and indirect distribution channels accounted for 78 and 98 of total net sales respectively %&. Apple strives to minimi:e the volume of its inventory due to cost
considerations. Accordingly2 5in ;1 $1 Apple had <.1 billion in inventory =a good number compared to <19$ billion of sales in fiscal year $1+>2 split in <1.0 billion in finished goods and <## million in components6. Marketing and sales. As it is illustrated in Figure + above2 Apple sells its products and services via four channels of distribution. Apple marketing budget of ?@ 1.1 billion%#& is spent on utili:ation of marketing communication miB that integrates advertising2 public relations2 events and eBperiences and direct selling. o single customer accounted for more than 1$8 of total sales for $12 $1+ or $1. )he company has been increasing its focus on enterprise sales during the past few years and C'( )im Cook announced an eBtensive reliance on Channel /artners to further increase the volume of enterprise sales. Apple is taking concrete steps in this direction. For eBample2 5Apple and Cisco revealed a partnership August $1# to optimi:e Cisco networks for Apple i(@-based devices and apps while also working to create a better business integration between Cisco voice and video environments and the i/hone.6%0& Service. Apple is famous for eBceptional "uality of customer services during all three stages* pre-purchase2 during the purchase and post-purchase. )he company maintains Apple eBperience centers in ma4or cities around the globe where anyone can use its products to become convinced about the "uality. Apple sales assistants are usually trained and polite young males and females who are technically savvy and happy to demonstrate product features and capabilities. /ost-purchase customer service is also impressive with uni"ue i/hone trade-in programs that allow i/hone users to upgrade their phone to newer models with additional payment. Apple Inc. Report contains a detailed discussion of Apple Value Chain Analysis. The report also illustrates the application of the major analytical strategic frameworks in business studies such as S!T" #$ST$%" #orter&s 'i(e 'orces and )c*insey +S )odel on Apple Inc. )oreo(er" the report contains analysis of Apple marketing strategy" leadership and organi,ational structure and discusses the issues of corporate social responsibility.
http--research(methodology.net-apple(value(chain(analysis-
A3< @A3U< 'BA7; A;A3C7
MAC 9#, 9:"% D /<6<'A4<37;E
Apple Inc. is a multinational technology company born in America and it has its headFuarters in 'upertino, 'aliornia. Apple is responsible or designing, developing, and selling consumer electronics, computer sotware, online services and personal computers.
7nitially ounded by Steve Jobs, Steve Wozniak and Ronald Wayne on April ", "#G1. 7t was created with a main purpose o developing and selling personal computers but then evolved into di+erent type o electronic devices. Apple is nowadays the worlds second-largest information technology company by revenue ollowing ater amsung
The very frst thing that comes to your mind when you talk about Apple is teve Hobs, who became synonymous with the brand name and as amous as the brand itsel. Hobs opened up several new vistas or the company and actually redefned the whole concept o mobile, during his time. Be came up with new and innovative ideas that would please the voracious minds o new(technology(hungry users all over the world.
;ot only was Hobs the main orce behind manuacturing new products into the market, but he also took an aggressive lead in marketing those products. Ence he was appointed the '
Another one o the maIor reasons or Apples success is its dynamic, constantly changing business plan. Hobs studied the market and tried to learn the needs o the audience. Apple originally started as Iust another computer company. 6ut Hobs always knew that it was meant or much bigger things.Apple had to widen its approach i it had to grow to great heights. The team, thereore, changed its business plan to introduce many more di+erent products. Hobs also changed the name o the company rom Apple 'omputer 7nc. to Apple 7nc., which gave the company a much broader spectrum and vision. 7 guess that with so many innovations and with such a great leader owner o such a uniFue perspective o the business, is
it any wonder that Apple is in the top o the
line> ;ow i we want to analyze its value chain we must frst understand what value chain stands or. @alue(chain analysis is an analytical ramework that assists in identiying business activities that can create value and competitive advantage to the business. Bere we have an illustration that can help us understand more easily Apples value chain. Primary Activities
Inoun% lo(istics.
Apple is known or working with hundred o suppliers rom all around the world and or maintaining highly sophisticated supply( chain management as you will see in the ne)t fgure. Apples commitments to their purchasing normally cover its reFuirements or periods or "%: entire days. 7ts '
Operations.
Apples operations are carried out by #9,1:: ull(time eFuivalent employees and an additional J,J:: ull(time eFuivalent temporary employees and contractors. The maIority o Apples hardware products are currently being manuactured by outsourcing partners that are situated primarily in Asia. A signifcant concentration o this
manuacturing is currently perormed by a small number o outsourcing partners, oten in single locations.
Outbound logistics.
Apples net sales through its direct and indirect distribution channels accounted or 9$K and G9K o total net sales respectively. Apple attempts to minimize the volume o its inventory due to cost manners. Accordingly, in L" 9:"J Apple had 59." billion in inventory a good number compared to 5"G: billion o sales in fscal year 9:"NO, split in 5".1 billion in fnished goods and 5%9% million in components.
Marketing and sales .
As you can see in the illustration above Apple has our main channels o distribution through which it sells products and services. Apples marketing budget is spent mainly on the use o a marketing communication mi) that entails advertising, public relations, events and e)periences and direct selling.
Service.
Pe all know that Apple is amous or e)ceptional Fuality o its costumer services all the three stages pre(purchase, during the purchase and post purchaseO. Cou can fnd Apple e)perience centers in maIor cities all around the world where anyone can try out the Apple e)perience and all in love with the brand and what it stands or. Apples sales assistants are especially trained and educated young adults with technological knowledge that are delighted to demonstrate product eatures and capabilities. The costumer service post(
purchase is commonly known to be impressive and has some uniFue ihone trade programs that allow ihone users to upgrade their 7hone to newer models with additional payment.
Sources) • • •
•
•
https--prezi.com-a9Nyvk:pbhbc-apples(value(chainhttp--www.mindtools.com-pages-article-newT/011.htm http--ba9:"w9:"9.blogspot.com-9:"9-:"-close(look(at( apples(value(chain.html http--research(methodology.net-apple(value(chain( analysishttp--en.wikipedia.org-wiki-@alue0chain
https--perpetualtravellers.wordpress.com-9:"%-:%-9#-apples(value(chain(analysis-
Market /esearch
I nani nt er v i ewwi t hFor t uneaf ewy ear sago,St ev eJ obsex pl ai nedt hatAppl e ne v erdoesmar k e tr es ear c h.Rat her ,t he ys i mpl ypr eoc c up yt hems el v e swi t h c r eat i nggr eatpr oduc t s . Wedonomar k etr es ear c h.Wedon’ thi r ec ons ul t ant s .Theonl yc ons ul t ant sI ’ v eev erhi r edi n my10y e ar si son efi r mt oa na l y z eGa t e wa y ’ sr e t a i l s t r a t e gys oIwo ul dn otma k es o meo ft h e s amemi s t ak est he ymade[ whenl aunc hi ngAppl e' sr e t ai l s t or es ] .Butwene v erhi r ec ons ul t ant s , p ers e .Wej u s twa ntt oma k eg r e atp r o du c t s .
Andwhenas k edaboutt hemar k e tr es ear c ht hatwenti nt oc r eat i ngt hei Pad,J obs r es ponded," None.I ti s n' tt hec ons umer s ' j obt ok nowwhatt he ywant .I t ' shar df or [ c ons umer s ]t ot el l y ouwhatt he ywantwhent he y' v enev ers eenan yt hi ng r emot el yl i k ei t . " Appl edoesengagemar ketr esear ch Ev e r ymo nt h ,Ap pl es ur v e y si Ph on eb uy e r sa ndJ os wi a kex p l a i n s whatApp l ei sabl et og l ea nf r om t hes es ur v e y s. Thes ur v ey sr ev eal ,c ount r y by c ount r y ,whati sdr i v i ngourc us t omer st obuyAppl e' s i Ph on epr od uc t sv e r s u so t h erp r o du c t ss uc hast h eAnd r o i dp r o du ct st h atSams u ng s el l s ,whatf eat ur est heymos tus e,ourc us t omer s ' demogr aphi c sandt hei rl ev el of s at i s f ac t i onwi t hdi ffer entas pec t sofi Phone. Andasy oumi ghte x pec t ,Appl ec onduc t ss i mi l ars ur v e y swi t h i Pa db uy e r s . t heWal l St r eetJ our nalhi ghl i ght ed s omeoft het y pesofques t i ons andans wer st hatappeari nt hes er es ear c hr epor t s : Onec har tl i s t sr es pons esf r om c us t omer si ns ev e nd i ff er entc ount r i es ,as k i ngt hem wh y t heyboughtani Phoneaf t erc ons i der i nganAndr oi ddev i c e.“ T r us tAppl eBr and” emer geda st hefi r s tors ec ondmos tpopul arr eas oni nmos tr egi ons ,i nc l udi ngi nt he U. SandChi nawh er e54% ofr es pond ent sc i t edi tasaf ac t or . So me67 %o fCh i n es er e s po nd en t ss a i dt h eyb ou gh tt h ei Ph on eb ec a us et h eyl i k e dt h e ph y si c al appear anc ean dd es i gn,t heh i ghes tper c ent ageac r os st hegr oup,whi c hal s o i n c l u de dJ a pa n,t heU. K. ,Fr an c e,Ger ma nya ndSo ut hKo r ea . Leas ti mpor t ant ,al mos tuni v er s al l y ,wast heabi l i t yt oeas i l yt r ans f ermus i candot her medi aac r os smul t i pl edev i c es .“ Gr eat erav ai l abi l i t yofappsIam i nt er es t edi n”wasa s i gni fi c antf ac t ori nSout hKor ea,wher e47% c i t edi tasar eas on.
J os wi aknot est hatAppl e' si Phoneandi Padr es ear c hdat ai sonl yci r c ul at edt oa s mal l s el ec tgr oupofAppl eex ec ut i v es . ht t p: / / www. net wor k wor l d. c om/ ar t i c l e/ 2222892/ wi r el es s/ howappl ec onduc t s mar k et r es ear c handk eeps i os s our c ec odel oc k eddo wn. ht ml
Appl es ur v ey si t scus t omer st os uppl ementt hei rowni nt er nal dat aandt hi nk i ng.Thi s c a met ol i g hti n20 12wh en ,du r i n gal e ga ls c ufflewi t hSams un g,t h ec ompa ny ’ sVPof Pr oduc tMar k e t i ngs ubmi t t edadoc ume ntt ot hec our te x pl ai ni ngwh ydoc ument sr el at i ng t oAppl e ’ smar k etr es ear c h( s pec i fi cal l yi Phones ur v ey s )s houl dbek epts ec r et . .
ht t ps : / / www. fl ex mr . net / bl og/ c ons umer i ns i ght / 2016/ 8/ s t ev ej obs mar k et r e s e a r c h . a s p x
Resear ch&Dev el opment
ht t ps : / / y c har t s . c om/ c ompani es / AAPL/ r _and_d_e x pens e
(ne of the hallmarks of @ilicon Valley companies is that they tend to increase their research and development =RD> budget during tough times2 not shrink them. Facing a slowdown in i/hone sales and other tribulations2 Apple is on track to spend <1$ billion on RD this year2 a +$8 increase from $1#. )hat!s "uite a leap. Ef you look at Apple!s recent financial report2 you know the Cupertino2 Calif. company had phenomenal earnings last "uarter. ut what spooked Gall @treet is that it!s clear that Apple!s i/hone sales tra4ectory has leveled out. @ales of i/hones during the last "uarter were only about # million2 compared to over 9$ million in the same "uarter a year before. Envestors2 who panic if they don!t see growth2 have penali:ed Apple!s stock in a big way for the slowdown. @o what could Apple be working onH Iere are a few ideas. Apple recently invested $1 billion in Didi2 a Chinese ride-sharing company that competes with ?ber. )his investment is further evidence that Apple has a serious interest in transportation. )his particular investment will help Apple gain greater insight into one of Apple!s most important markets2 as well as signal to China!s government and its people that Apple believes in that country!s growth.
,iven the rumors that Apple is working on some form of a car J or at the very least working on ways to make cars smarter J you can bet that a significant portion of this RD spending will be in the automotive space.
Apple C! "im Coo# believes that virtual reality V%& is not a passing 'ad( signaling that Apple has great interest in this area. E suspect that Apple has multiple VR pro4ects in the works2 including one that most likely has the i/hone!s fundamental technology built into a VR headset.
Apple is highly committed to the iPhone2 i/ad2 3ac lineup and the Apple Gatch2 as well as its lucrative services businesses. E suspect that at least < billion of this RD budget will be used to bring more innovation to these devices and Apple!s services platforms to keep them competitive. Coo# made a comment late last year during an earnings call that Apple is working on various 5things6 unknown to the outside world. 3ore recently2 Cook has said that he is highly eBcited about the products Apple has in the pipeline2 adding that he has no concern about Apple!s future and its ability to continue to innovate and 5delight6 its customers. Clearly a portion of this RD will be aimed at these mystery pro4ects.
ht t p: / / t i me. c om/ 4339940/ appl er dr es ear c hdev el opment /
Apple*s /Q4 e)pense saw a signifcant bump up beginning in mid(9:"J. 7t was clear Apple was up to something big. Bowever, ater looking at Apple*s 9L"1 results, it appears 7 underestimated the situation. As depicted in <)hibit ", Apple is now on track to spend more than 5": billion on /Q4 in 9:"1, up nearly N:K rom 9:"% and ahead o even my aggressive estimate. This is a remarkable eat considering that Apple was spending a little over 5N billion per year on /Q4 Iust our years ago. *+hiit !) Apple -$ *+pense Annual/
roIect Titan will lead to Apple actually shipping an electric car. At this point, 7 peg odds o Apple selling its own electric car to be at least $: percent. There is one very simple reason or my high degree o confdence roIect Titan is a long(term pivot. 7 don*t consider Titan to be Iust another proIect that Apple has been tinkering around with in the lab or years like an Apple television set or Apple encil. 7nstead, roIect Titan is much more about building a oundation or Apple that will literally represent the company*s uture. 7t was recently revealed that Apple has set up a web o roIect Titan buildings and inrastructure spread across anta 'lara, unnyvale and an Hose. This means that it is incorrect to think o roIect Titan as Iust being about one product or one eature. 7nstead, Apple is building an entire start( up ocused on the electric car industry, giving me a high level o confdence that Apple*s e+orts will lead to products. Phen diving deeper into roIect Titan, this is where there is greater unknown as to whether a certain technology will ever ship, such as various autonomous driving eatures, di+erent eatures or new internal passenger compartments, uniFue car materials, and the list goes on.
ht t ps : / / www. abov eav al on. c om/ not es / 2016/ 5/ 11/ appl er dr ev eal s api v ot i s c omi ng
Avalon!s eil Cybart2 a longtime financial analyst2 Apple-tracker2 and one of the more accurate predictors on the company!s earnings2 has released an in-depth investigation into the company!s research and development efforts. Iis findings show that Apple AAPL 0. 96% is ramping up its RD spending at a rapid rate2 suggestingthat in 4ust a few years2 5we are no longer going to refer to Apple as the i/hone company.6
Cybart dug through Apple!s financials to look back at how the company has invested in research and development over the years. Ie found that Apple spent more than < billion on it in $1+ and then <0 billion in $1. y $1#2 the RD costs had risen to <7 billion. ow2 he believes that Apple is on track to spend more than <1$ billion this year on research and development in $10 and more than <1 billion neBt year. 5)his is a remarkable feat considering that Apple was spending a little over <+ billion per year on RD 4ust four years ago26 he wrote. )he ramp up in research and developmentJan unprecedented one when compared to its eBpenditures dating all the way back to 10J suggest something big might be up at Apple2 Cybart argues. Ghile he acknowledged that it!s possible the increasing spending is due to a broader product line or Apple could try to get into more product categories2 he believes the most likely reason is that Apple wants to turn into a different kind of company. ,et ata @heet2 Fortune!s technology newsletter. 5Apple is ramping up RD because they have a few big bets that re"uire a massive increase in investment26 Cybart writes. 5)he two most logical areas for these bets are wearables and personal transport initiatives. En both cases2 Apple is moving well beyond its comfort :one of selling pieces of glass that can be held in one!s hand. Enstead2 Apple is literally building a new company with additional capabilities and strengths.6 Apple did not immediately respond to a re"uest for comment. Cybart!s comments come as rumors continue to pile up that the company is working on a electric car. Although Apple itself has not said for sure that it!s planning to a car2 the company has hinted at such plans and made strategic hires in that market. )esla TSLA 1. 32% C'( 'lon 3usk says Apple!s car ambitions are an 5open secret6 in the industry. 3eanwhile2 Apple seems committed to the idea that its wearable2 Apple Gatch2 could be the leading device for what is eBpected to be a
booming industry. Ghile Apple has yet to share sales figures on its wearable2 most analysts believe the company is leading the pack by a wide margin. )he idea that Apple would 5pivot26 as Cybart claims2 seems rather bold. Iowever2 in the company!s last-reported "uarter ended 3arch 02 its i/hone business2 which takes up the largest chunk of its operation2 saw revenue slide 178 year-over-year to <+. billion. 3eanwhile2 Apple!s i/ad and 3ac sales also fell. En total2 Apple!s <#$.0 billion in revenue was down 1+8 year-over-year. )hose issues2 coupled with disappointing performance in China2 has prompted worry among investors. 3eanwhile2 Apple C'( )im Cook has been forced to allay fears2 saying that the trouble is only temporary. Ie has also promised big things for the future2 but won!t say eBactly what they are. Ie has even pitched the idea of possibly spending more than Apple ever has on a ma4or ac"uisition. @imply put2 ma4or changes could be afoot. For Cybart2 however2 the RD eBpenditures make the prospect of those ma4or changes seem real. Ie argues that the company will indeed get into the car business2 and all that!s re"uired to guarantee that prediction is looking at how it!s spending money. 5Apple is not spending <1$ billion on RD 4ust to come up with new Gatch bands2 larger i/ads2 or a video streaming service26 he wrote on his blog. 5Enstead2 Apple is planning on something much bigger* a pivot into the automobile industry.6 Cybart added that by pivot2 he means that Apple will take what it has learned from other markets2 like 3acs and i/hones2 and use it to its advantage in cars. 5Apple is designed to move from product to product2 industry to industry26 Cybart said of the company!s organi:ational structure. 5Ge see the company do 4ust that by entering the smartphone market2 followed by the wearables market and soon2 the auto market.6 ,iven all the data and the eBpenditures2 Cybart says that Apple!s chances of selling its own electric car are 57$8.6 ?ltimately2 he says2
while the i/hone will remain important to Apple2 it will eventually be less important to the company. 5Apple wants to move beyond the i/hone26 he predicts. ht t p: / / f or t une. c om/ 2016/ 05/ 12/ appl er es ear c handdev el opment /
Sour c i ng
Ours uppl i er sempl oymor et han1. 6mi l l i onpeopl ei n20 c ount r i es .
ht t p: / / www. pc mag. c om/ ar t i c l e2/ 0, 2817, 2422763, 00. as p
Apple assembles almost all of their iPhones in factories in 2hina. P2 Magazine attributes this outsourcing decision not on purely on labor cost"savings but on the fact that 2hinese factories are able to produce smartphones in large volumes very )uickly. Hf the = million iPhones sold in ,11# none were manufactured in the N.7. while ! percent of all iPhone !s were assembled in 2hina. 3or ,11# Apple outsourced an estimated =# workers abroad.
7teve obs once said that the iPhone >obs won4t be coming back to America not because of cheap# labor# but because Asian factories product fast# really fast# and at a much larger scale and fle:ibility# the infographic stated.
Eot only is Apple sourcing most of its assembly >obs from 2hina# many of its iPhone parts " including its screen# glass polishing# speakers and vibration u nit " come from rare arth minerals that mostly come from 2hina. iPhones are also e)uipped with a product called Byroscope from 3rench"(talian company 7TMicroelectronics designed to shift the screen display from portrait to landscape view.
http--www.strategicsourceror.com-9:"N-:$-how(apple(and(google(di+er(in.html )he success of the world!s biggest technology company has come on the back of a robust supply chain network. FoBconn2 a )aiwanese company2 is one of its strategic supply partners that churn out tens of thousands of its flagship products each day. 3anufacturing for Apple isn!t easy. @ales estimates are difficult to forecast2 and for such compleB products2 the time to market is eBtremely short. As Apple needed FoBconn and FoBconn needed Apple2 the relationship was mutually beneficial. Et was a fine eBample of procurement playing an instrumental role in managing growth. /egatron. )his company already manufactures i/ad 3inis and some versions of the i/hone.
6ased on the ranking rom Rartner, Apple is the top o supply chain e)cellence, ollowed by Mc4onald and Amazon. At least #GK o Apples procurement e)penditures or materials, manuacturing and assembly o products are fnished worldwide in 9:"N. ;one o these ihones were produced in the U, e)pect vital components, and nearly $%K were assembled in 'hina. Why Apple obsessed to outsource its production line to other countries, especially in Asia? Steve Jobs once claimed that it was not because of the cheap labor in Asian countries, but those factories could produce much faster with quite a large scale and flexibility. ne of Apple!s well" #nown suppliers is $oxconn, which is a %aiwan company. %hey can produce thousands of i&hones each day with relatively lower cost o f labors. Apple also found another supplier, &egatron which is also a %aiwan company, to produce i&ad and some versions of i&hone. Apple has already had so much outsource suppliers, why the scales of suppliers still #eep increasing?
•
%here are four reasons. 'is# (iversification. With the aim to build a stable supply chain, multiple suppliers can help Apple react faster to problems or disruptions and become more flexible.
•
•
•
)apacity *anagement. %he demand of Apple product has increased, especially from two large emerging mar#ets, )hina and +ndia. - million units of i&hone and i&hone &lus were sold in the first wee#end. Apple needs to increase its capacity more quic#ly to meet the demand. *argins Sustenance. With multiple suppliers, Apple could increase the bargaining leverage in order to maintain the low cost and high level of profitability. Supplier +nnovation. /ew suppliers are more willing to invest capital to improve operation efficiency and high quality of product to obtain reliance from customers. Apple can easily benefit from the growth of new suppliers.
http--cmuscm.blogspot.com-9:"J-:#-apples(sourcing(strategy.html
roduction 3o:conn# AppleIs biggest supplier# which assembles the iPhones mostly in its facilities in 2hina# has installed robots &nicknamed 3o:bots' for the first time to meet its iPhone production )uotas.
The biggest difference Apple has from other manufacturers is that it sources its materials and components from other manufacturers that operate throughout the globe. 3or e:ample# its displays are mainly made in apan by apan isplay and 7harp# and some are still made in 7outh Forea by ?B isplayG whilst the Touch ( sensor found in its recent iPad and iPhone models are made in Taiwan by T7M2 &Taiwan 7emiconductor Manufacturing 2ompany' and intec. (n fact# its list of suppliers for ,1O",1! stretches to more than , various suppliers located throughout the world. This brings up a lot of interesting facts about Apple4s supply chain# where it has to manage a huge number of suppliers and funnel their work into a single device. This is what makes Apple a fascinating company to research and understand. (n order for it to operate economically# it has to source parts from various different countries and continents# manufacture and assemble the parts in another# have warehouses located around the world to supply enough devices for the whole world and finally be able to distribute it to its customers at a reliable speed. @here are Apple products made/ @hich companies make the iPhone " and whereR
?et4s dive into the individual parts that make up an Apple device. More specifically# let4s look at Apple4s iPhone line. +ere4s a breakdown of the components that go into the iPhone !s and the iPhone
Content continue !elo" •
•
•
•
•
•
•
•
Accelerometer/ 8osch in Bermany. (nvensense in the Nnited 7tates. Audio 2hipsets and 2odec/ 2irrus ?ogic in the Nnited 7tates &outsourced for manufacturing'. 8aseband processor/ ualcomm in the Nnited 7tates &outsourced for manufacturing'. 8atteries/ 7amsung in 7outh Forea. +uizhou esay 8attery in 2hina. 2ameras/ 7ony in apan. Hmni5ision in the Nnited 7tates produces the front"facing 3aceTime camera chip but subcontracts TM72 &in Taiwan' for manufacturing. 2hipsets and Processors/ 7amsung in 7outh Forea and T7M2 in Taiwan. Alongside their partner Blobal3oundries in the Nnited 7tates. 2ontroller 2hips/ PM2 7ierra and 8roadcom 2orp in the Nnited 7tates &outsourced for manufacturing'. isplay/ apan isplay and 7harp in apan. ?B isplay in 7outh Forea.
•
DAM/ T7M2 in Taiwan. 7F +yni: in 7outh Forea.
•
e2ompass/ Alps lectric in apan.
•
•
3ingerprint sensor authentication/ Authentec makes it in 2hina but outsources it to Taiwan for manufacturing. 3lash memory/ Toshiba in apan and 7amsung in 7outh Forea.
•
Byroscope/ 7TMicroelectronics in 3rance and (taly.
•
(nductor coils &audio'/ TF in apan.
•
Main 2hassis Assembly/ 3o:conn and Pegatron in 2hina.
•
Mi:ed"signal chips &such as E32'/ EP in Eetherlands.
•
•
•
•
•
•
•
Plastic 2onstructions &for the iPhone !c'/ +i"P and Breen Point in 7ingapore. Dadio 3re)uency Modules/ @in 7emiconductors &module manufacturers Avago and D3 Micro evices' in Taiwan. Avago technologies and Triuint 7emiconductor in the Nnited 7tates. ualcomm in the Nnited 7tates for ?T connectivity. 7creen and Blass &for the display'/ 2orning &Borilla Blass' in the Nnited 7tates. BT Advanced Technologies produces the sapphire crystals in the screens. 7emiconductors/ Te:as (nstruments# 3airchild and Ma:im (ntegrated in the Nnited 7tates. Touch ( sensor/ T7M2 and intec in Taiwan. Touchscreen 2ontroller/ 8roadcom in the Nnited 7tates &outsourced for manufacturing'. Transmitter and Amplification Modules/ 7kyworks and orvo in the Nnited 7tates &outsourced for manufacturing'.
As we4re able to see# Apple4s manufacturing and outsourcing of products is very diverse and sprawls across numerous countries around the world. This goes without mentioning a lot of the other suppliers and manufacturers that are within the supply chain of some of the companies listed aboveS (t should be noted that the design# development and marketing work# not to mention the creation of the software# are all done in"house by Apple in the Nnited 7tates. The company remains a huge employer in its home country.
And so we return to the original )uestion/ @here is an iPhone &or an iPad# or the component parts of any Apple device' madeR The answer is/ everywhere. ue to the comple: supply chain within each of these companies# the number of countries involved in the manufacturing and even assembly process of Apple4s devices is impossibly diverse.
The reason Apple sticks Made in 2hina on its devices is because the ma>ority of the parts tend to be sourced from 2hina# but they are fre)uently made elsewhere &in Taiwan# for e:ample'. The assembly of Apple4s devices is for the most part done in 2hina " which is why we will continue to see Made in 2hina despite a lot of these companies# including Apple# creating their designs in countries like the Nnited 7tates. ?ooking more closely at the 2hinese assembly line# it4s also made people )uestionwhy Apple has chosen to outsource and even assemble its devices outside its domestic territory and choose 2hina as its primary location. The simple answer is/ 2hina allows greater fle:ibility and even has the natural resources to cope with high"demand manufacturing. According to research firm (+7# the iPhone
http--www.macworld.co.uk-eature-apple-are(apple(products(truly(designed(in( caliornia(made(in(china(iphonese(N1NN$N9-
Appl e’ sPr oductDevel opmentPr ocess maybeoneoft hemost s uc ces sf ul des i gnpr oc es s ev e ri mpl e me nt e d.Wi t ht h ec o mp an yv e r g i ng onbec omi ngt hewor l d’ sfi r s t$1t r i l l i onbus i nes sor gani z at i on–t her e’ sa l ott hatdes i gner scanl ear nf r om Appl eandi nt r oduc ei nt ot hei r owndes i gn e nv i r onment s .
tAppl et heyputdes i gnatt hef or ef r ont . J on yI v e–t heBr i t i s hdes i gnert hati st heCh i efDes i gnOffic er( CDO)atAppl e–and hi sdes i gnt e a m l eadt hec ompan yandt he ydono tr epor tt ofi nanc e,manuf ac t ur i ng,e t c . Theyar egi v enf r eer ei nt os ett hei rownbudget sandar egi v ent heabi l i t yt oi gnor e manuf ac t ur i ngpr ac t i c al i t i es . Att hehear toft hedes i gndepar t menti st heI ndus t r i al Des i gnSt udi owher eonl yas el ec t f ewAppl eempl oyeeshaveaccess. I t ’ sas i mpl ec onc eptt hatal l owsf ort hec r eat i onofi nc r edi bl epr oduc t s . Desi gnTeamsar eSepar at edFr om t heLar gerCompany
Wh enad es i g nt ea m wo r k so nane w pr od uc tt h eya r et h enc utofff r o mt h er es toft he Appl ebus i nes s .The yma yev e ni mpl ementph y s i c al c ont r o l st opr e v entt het eam f r om i nt er ac t i ngwi t hot herAppl eempl o y eesdur i ngt heda y . Thet eam i sal s or emov edf r om t het r adi t i onal Appl ehi er ar c hyatt hi spoi nt .Theycr eat e t hei rownr epor t i ngs t r uc t ur esandr epor tdi r ec t l yt ot heex ec ut i v et eam.Thi sl eav est hem f r eet of oc usondes i gnr at hert handay t odaymi nut i ae.
Th eAp pl eNe wPr o du c tPr o c es s( ANPP)i n f o r ma t i o ni sg i v e nt oap r o du c td ev e l o pme ntt e am whent he ybegi nwor k .I tde t ai l sev er ys t ageoft hedes i gnpr oc es sandi tgoesi nt oel abor at e det ai l .Thei deai st odefinewhats t agest hepr oduc tc r eat i ont eam wi l l got hr ough,whowi l l be r es pons i bl ef ordel i v er i ngt hefinal pr oduc t ,whowor k sonwhi c hs t ageandwher et he ywor kand a l s owh ent h ep r o du c ti se x pe ct e dt ob ec omp l e t e d.
oneoft hek e y st oAppl e ’ ss uc c es si st ha tt he ydon ’ twor konhundr edsofne w pr oduc t satonc e. I ns t ead,r es our c esar ec onc ent r at edonahandf ul ofpr oj ec t st hatar ee xpec t edt obearf r ui t r at hert hanbei ngdi l ut edo v erman yl es s erpr oj ec t s .
Th eEPM i st h ee ng i n ee r i n gp r o gr a m ma na ge ra ndt h eGSM i st h eg l o ba ls u pp l y manager .T oget hert he yar ek nownwi t hi nAppl east he“ EPM Mafi a” .I t ’ st hei rj obt ot ak e o v erwh enapr o duc tmo v esf r om d es i gnt opr od uc t i o n. Asy oumi ghte x pec t ,t hes epeo pl ear eu sual l ygoi ngt obef oundi nCh i na,Appl edoes v er yl i t t l eofi t sownmanuf ac t ur i ng.I ns t eadi tr el i esonc ont r ac tout s our c i ngc ompani es l i k eFox c onn( oneoft hel ar ges templ oy er si nt hewor l d)t odot hi sf ort hem.Thi s r emo v esmuc hoft heh ead ac heofmanuf ac t ur i ngf orAppl ewhi l s tk e epi ngpr oduc t i on c os t sasl owaspos s i bl e.Ther ei sas i gni fi c antmar k etadv ant aget ot hi sappr oac hand i t sonet hatman yot herel ec t r oni c smanuf ac t ur er sar eemul at i ngnow. Th eEPM Ma fi ama ys o un ds c a r y( a ndt h eypr o ba bl yar et ot h es up pl i er s )b utt he i rr e al j obi ss i mpl yt oens ur et hatpr oduc t sar edel i v er edt omar k eti nt her i ghtway ,att her i ght t i meandatt her i ghtc os t .Theymaydi s agr eeatpoi nt sbutt hei rgui di ngpr i nc i pl ei st o ac ti nt hei nt er es t s oft hepr oduc tatal l t i mes .
Thefi nal s t epi nAppl e ’ spr oduc tde v el opmenti spr oduc tl aunc h.Whent hepr oduc ti s c ons i der edt obeasgoodasi tc anbe–i tent er sanac t i onpl ank no wnas“ t heRul esoft he Road” .Thi sex pl ai nsal l t her es pons i bi l i t i esandac t i onst hatmus tbet ak enpr i ort oac ommer c i al l aunc hoft hepr oduc t .
https--www.interaction(design.org-literature-article-apple(s(product(development( process(inside(the(world(s(greatest(design(organization
Marketing Immediately after college dropouts Steve Jobs and Steve Wozniak founded Apple in April 1976 t!e duo initially sold some "## circuit boards t!at t!ey produced inside an unused garage$ %!ey subse&uently introduced t!e '(bit fully functional !ome computer Apple II in 1977 and it eventually became one of t!e first !ig!ly successful commercially produced microcomputers in t!e market$ )ut t!e company did not rest alone *it! designing and manufacturing computers$ Apple e+panded its product portfolio and successfully emerged as an innovative and influential multinational tec!nology company$ %!e introduction of i,od in "##1 and t!e online music and app store i%unes !ave revolutionised t!e music industry t!roug! t!e promotion of digital music$ %!ese t*o products created and supported an emerging ecosystem for selling and
purc!asing music via t!e Internet$ %!e company *as also instrumental for us!ering in t!e era of smartp!ones and tablet computers *it! t!e introduction of i,!one in "##7 and i,ad in "#1#$ %!ese t*o consumer electronic devices !ave reimagined t!e *ay manufacturers develop and produce mobile devices$ -nderstanding t!e success of revered and culturally iconic products suc! as t!e i,od and t!e i,!one nonet!eless re&uires an appreciation of t!e overall marketing strategy of Apple$ After all t!is prudently and intricately crafted strategy !as played a critical role in !urling its brand and products to*ard an unprecedented level of popularity and approval$
*S0A1IS3I45 03* 6MP*0I0I8* A$8A40A5* F APP* 03953 P$960 S0A0*5: Jobs left Apple in 19'. and around t!is time t!e Apple II and /acintos! series of !ome computers *ere pitted against ,0 computers from I)/$ %!e competition *as toug! and Apple *as at t!e losing end$ %!e company struggled *it! maintaining sales and it finally succumbed to defeat as Windo*s(based personal computers from /icrosoft gained a strong!old in t!e market$ %!e poor performance of Apple stemmed from its poor product strategy$ Apparently t!e company *as producing and selling an array of computer products t!at *ere redundant and confusing$ W!en Jobs returned in 1996 to lead t!e company !is first order of business *as to discard all unprofitable products and realign t!e product strategy based on t!e concept of simplicity and premium user e+perience$ %oday product strategy is at t!e core of t!e marketing strategy of Apple$ urt!ermore it !as become t!e competitive advantage of t!e company and its flags!ip products to include t!e /ac)ook i,od i%unes i,!one and i,ad$ 2ne of t!e reasons *!y t!ese products !ave become successful is t!at t!ey are user friendly and !ig!ly intuitive compared *it! t!eir competitors$ %!ey are also unassuming because of t!eir simple and uniform built and design$ 2f course despite t!is simplicity t!ese products provide a premium user e+perience t!roug! innovative features and design considerations$ It is important to remember t!at t!ese products *ere not original$ %!ere *ere already ultrat!in laptops long before Apple introduced t!e /ac)ook Air$ ,ortable media devices !ad e+isted prior to t!e popularity of i,od$ /oreover t!ere *as already a market for smartp!ones and personal digital assistants before t!e i,!one and i,ad revolutionised mobile computing and t!e consumer electronics industry$ 3o*ever t!ese products !ave outcompeted t!eir predecessors and some of t!eir counterparts because t!ey provided an innovative and uni&ue overall product usability and consumer e+perience$ Apple employs a retroactive and proactive approac! as part of its product strategy$ 4ssentially t!e company develops its products based on t!e e+isting products of competitors but it improves t!em by removing undesirable &ualities and integrating differentiating features$ %!e results are products t!at appear ne* and innovative but are still familiar or recognisable$
6*A0I45 A4$ S9S0AI4I45 1A4$ :A0: 03953 6MPIM*40A: P$960S %!e e+tensive but controlled product portfolio of Apple creates a uniform and uni&ue product usability and consumer e+perience$ An i,od or an i,!one *ould be incomplete if not paired *it! an i%unes or t!e App Store$ %!e sleek metal(based aest!etics of a /ac)ook also signals a sense of uniformity *!en used alongside t!e i,!one$ %!e user interface of t!ese consumer electronic devices also employs t!e same functional and design principles centred on simplicity t!ereby creating a strong sense of familiarity$ It is also important to note t!at a particular user of different Apple devices can take advantage of t!is !omogeneity t!roug! t!e Apple I5$ %!is all(access account allo*s users to manage t!eir digital identity files and device preferences across different devices t!ereby allo*ing seamless transition$ Apple products create a !alo effect$ )ecause eac! product complements anot!er product consumers *ould usually c!oose to stick *it! t!e Apple brand rat!er t!an buying different products from different manufacturers and create a !odgepodge of varying product and consumer e+perience$ 0onsidering t!e fact t!at t!e company !as a large pool of loyal consumers t!ey tend to buy all products under t!e Apple brand$ %!is !alo effect coupled *it! deep brand loyalty complements t!e sales performance of eac! Apple product$ %!e development and promotion of complimentary products and services are undeniably part of t!e marketing strategy of Apple$ Wit! iconic and relevant products coupled *it! industry tenure and establis!ed branding t!e company no* enoys legions of loyal consumers t!at comparable to fandoms of popular celebrity$
MAI40AI4I45 1A4$ IMA5* 03953 P*MI9M PI6I45 S0A0*5: %!e products of Apple are relatively e+pensive *!en compared *it! similar products from competitors$ An i,!one can be t*ice or t!rice more e+pensive t!an t!e flags!ip Android smartp!ones of ot!er manufacturers$ %!e same is also true for /ac)ook ,ro and /ac)ook air$ 2ne /ac)ook laptop can even buy t!ree to five Windo*s(based laptops from 24/s$ )ut premium pricing is also part of t!e marketing strategy of Apple$ %!is !ig! price point or premium pricing strategy !as !elped t!e company promote and maintain a favourable perception among its loyal buyers$ After all t!ere are consumers *!o believe t!at e+pensive products enoy an e+ceptional reputation or represent e+ceptional &uality and distinction$ %!ereby Apple products are positioned as superior over t!eir competitors t!roug! t!is pricing strategy$ It is also important to consider t!e fact t!at lu+ury !as a psyc!ological association *it! premium pricing$ -ndeniably Apple products are lu+ury goods because of t!eir !ig! price points and consumers of lu+ury good are *illing to pay e+tra in order to maintain a sense of indulgence or a status symbol$ 2f course t!ere are reasons to believe t!at Apple is not merely e+ploiting t!eir e+isting consumer base or its target lu+ury market$ As mentioned part of its product strategy is to provide a premium user e+perience and one of t!e *ays t!e company does t!is is t!roug! its product design considerations$ %ake note of t!e i,!one as an e+ample$ -nlike ot!er
Android smartp!ones *it! lo*er built &uality due to its plastic components Apple !as designed and built its product using premium materials to include glass and aluminum$
03* 94I;9* MA<*0I45 A4$ A$8*0ISI45 SI09A0I4 F 03* IP34* 5espite its record(breaking sales performance and a !ig! level of popularity t!ere are no e+tensive marketing strategy for t!e i,!one apart from product and pricing strategies and publicities coursed t!roug! trades!o*s and media relations$ It is *ort! noting t!at t!ere is minimal advertising budget for t!e i,!one$ Apple !as never advertised t!is product t!roug! print and broadcast media alt!oug! it occasionally produces contents for online and social media distribution$ or traditional media consumers are still e+posed to advertising messages related to t!e i,!one delivered t!roug! different traditional mediums simply because t!ey are created and paid by net*ork carriers$ W!enever a ne* iteration to t!e i,!one series arrives net*ork carriers are eager to announce to t!eir e+isting consumer base and target market t!at t!ey are already offering t!e product under several service plans$ Alt!oug! it seems t!ey are doing Apple a favour t!ese carriers are actually marketing t!emselves using t!e i,!one as bait t!ereby luring customers or t!e target market to*ard t!eir respective mobile and data services$ 3o*ever t!ese net*ork carriers are not free from restrictions$ Apple !as maintained stringent branding guidelines t!at essentially dictate t!e manner in *!ic! carriers develop and implement t!eir advertisements$ %!e company does t!is to maintain and protect its brand and promote uniformity in its establis!ed marketing message$ i,!one ads virtually look t!e same even t!oug! t!ey came from different advertisers$ %!is uni&ue marketing and advertising situation of t!e i,!one demonstrates t!e effectiveness of t!e overall marketing strategy of Apple t!at moreover centres on product and pricing strategies$ %!e product is !ig!ly valuable because of its popularity and if net*ork carriers *ant to capitalise on its success t!ey need to advertise t!at t!ey !ave it$
http--www.versiondaily.com-the(marketing(strategy(o(apple(a(concise(analysis-
was voted the overall winner of the $1 'ME urvey Award or Marketing <)cellence K yet again. Apple has been selected as the winner or co-winner for five consecutive years by the sample of top marketers. @o why is Apple a great marketerH Ghen Apple2 Enc. =then Apple Computer2 Enc.> incorporated in anuary 1992 its investorLadvisor2 3ike 3arkkula2 assembled a N(point marketing philosophy . Ama:ingly2 thirty-five years later2 this philosophy remains at the core of what makes Apple so effective at creating and profiting from loyal customers. )his2 in my view2 is the definition of a strong marketing capability. Iere are Apple!s original three points*
".
9.
2ocus S 7n order to do a good Iob o the things we decide to do, we must eliminate all o the unimportant opportunities.
N.
7mpute S eople 4E Iudge a book by its cover. Pe may have the best product, the highest Fuality, the most useul sotware, etc.V i we present them in a slipshod manner, they will be perceived as slipshodV i we present them in a creative, proessional manner, we will impute the desired Fualities.
Apple has used these principles to become the world!s most valuable company =measured by market capitali:ation> and one of world!s most valuable brands. Iere are ten strategies Apple has used to become one of the world!s greatest marketers* http--www.orbes.com-sites-christinemoorman-9:"9-:G-":-why(apple(is(a(great( marketer-W9N:b":%1cb:
Competitive advantage in the )ar#eting strategy o' Apple
Apple has several competitive advantages over its competitors 1.
@uperior technology products M 3acbook and Ewatch are clearly leaders in their market space because of the (@ and the technology used. . rand e"uity M Apple has repeatedly taken the top spot for its brand e"uity and has a cult following since ages. +. Revenue over time M Apple has deep pockets due to its high margins. . RD M A ma4or competitive advantage of Apple is the amount it spends on RD keeping its eyes on the future rather than on the present.
"agline * 5)hink ifferent6 is one of the best slogans in the tech industry. 3any people assume that Apple launched the slogan 5)hink different6 in response to E3!s slogan 5)hink6. Iowever2 since $$2 Apple stopped using the slogan in its marketing. ut from time to time2 the slogan has bounced back on Apple!s website or in their marketing and it has never left the mind of Apple loyal consumers.
http--www.marketing#".com-marketing(strategy(apple-
swot
+trengths in the +,!" analysis o' Apple
1.
nnovative products * (ne of the key strengths of Apple over the years has been its innovative product line up. Apple has presented hit products after hit products and that!s been the ma4or strength of Apple. Enitially it came with the 3acook2 then the i/od2 the Ephone2 the Epad2 the Ewatch. En short2 Apple has covered almost everything that an individual 5desires6. . .eadership position * As per Gikipedia2 Apple is the leading technology company in the world with regards to revenue generated. Et is also the second largest mobile phone manufacturer. Et become the first ?@ company to cross 9$$ billion dollars and in $1 was the largest publicly traded company in the world. Ef that does not define leadership2 then nothing else can. Apple is far ahead in the leadership game. +. /rand e0uity * aturally2 being in the leadership position re"uires that your brand e"uity be high. )he brand Apple is the number 1 valued brand amongst all the companies in the world as of $10. )he brand value in $1# was estimated to be 117. illion dollarsNN . Design "echnology * )he best part of Apple2 and the reason for its fantastic brand e"uity is its design as well as the technology it uses. Apple has always been suave and elegant in its design. And at the same time2 beneath this eB"uisite design is a machine powered to give ultimate performance. All this runs on the 3ac(@ which is another software known for its efficiency. #. Distribution * Apple has 9$ of its own stores across 19 countries. esides these stores2 it sells through trade partners2 online channels as well as through other premium retail stores. 'ntering an Apple owned retail store is a fantastic eBperience. Additionally2 Apple also launched the Apple genius bar to directly solve customer issues within the retail store itself. )hus2 the concentration of Apple on its sales and service distribution is legendary. 0. +teve obs * (ne of the key factors and the leader of Apple is also a loved person in the technology Endustry. Ie is an inspiration to all marketers in the way that he led his own people and the way he carried his life and the brand Apple along with him. @ince $112 his departure from this world2 Apple has been led by )im cook who is also showing his genius in growing Apple as a company. 9. )argins * (ne of the core advantages of Apple as a company is the margins that it commands over its products. eing a technological leader with a top brand e"uity2 Apple keeps a hefty margin for itself to invest in RD and brand building. Furthermore2 its pricing strategy is such that the price does not break in the market and you will always find Apple selling at the same price in various retail stores. 7. Consumer 'ocus * Apple always designs its products with a focus on consumers while keeping their mind in the future. )hey always try to imagine the things which even the consumer has not imagined yet. As per @teve 4obs 5if you ask the consumer what he wants2 by the time you give
him the same thing2 he will want something else6. )his ideology is the reason of success for Apple. ,ea#nesses in the +,!" analysis o' Apple
Gith a company which is a market leader and innovative2 we can eBpect very few weaknesses. @till2 here are + weaknesses which Apple might be facing. "able o' Contents %hide& •
1 Oet us discuss the @G() analysis of Apple as a company o 1.1 @trengths in the @G() analysis of Apple o 1. Geaknesses in the @G() analysis of Apple o 1.+ (pportunities in the @G() analysis of Apple o 1. )hreats in the @G() analysis of Apple o 1.# Related /osts* 1. )atching Customer e3pectations * eing a leading company since 17$!s Apple has a ma4or market share and the consumer eBpectation is going through the roof. /eople eBpect great things from apple year after year and maintaining these eBpectation levels is not easy for anyone. . ncompatibility * A key issue in Apple as a company is that many of its products are incompatible with third-party software L accessories. @o overall2 when you buy a product of Apple2 you enter the Apple universe and you have to continue with Apple only. )hat makes a huge impact on consumer decision-making. +. Dependency on 'e4 products * Apple has only 9-7 products in its portfolio in comparison to the various products that its closest competitors 3icrosoft and ,oogle have. Ience the dependency of Apple on each of its products is very high. Ef one product fails2 then that is a 1$8 loss to Apple. Ience2 there is a common demand from Apple to increase its product portfolio. !pportunities in the +,!" analysis o' Apple
1.
Apple cars * aturally2 with Facebook eBpanding with Enstagram2 (cculus rift2 Ghatsapp and others and ,oogle eBpanding in 1$ different ways2 Apple wanted to find out some new products which Apple could launch. Apple is now fiBated on Apple Car which is supposed to be launched in $$. Oike any other product of Apple2 we can eBpect great things from the Apple car as well. . "echnological advancement * En the technology industry2 technological advancement is always an opportunity. And the one brand we can eBpect to leverage technology to its best is Apple. Ge can eBpect even more advanced 3acook!s2 Ephones2 Epads and Ewatches in the coming years. +. "he gro4ing mar#et * Apple is a growing company in a growing market. '"ually important to the company is the rising ,/ of developing countries2 thereby increasing consumption of such premium brands like Apple. Any company which is growing needs a larger market base and the market base is slowly being built via territory eBpansion for Apple.
.
4atch and Apple "V * )wo products which can increase the presence even further are the Ewatch and Apple )V2 both of which are aimed at the future2 for when the digital presence increases. Apple Ewatch already has a #$8 market share of @mart watches in ?@.
"hreats in the +,!" analysis o' Apple
Apple as a company does not have any threat. ut as products2 each of the products is facing strong threats from the competition. eing the number 1 company in the world is not easy and you are going to face competition especially from other brands.
1.
)ar#et penetration in +martphones * (ne of the key threats to Apple is the market penetration by other brands in the @martphone market. Android is eating market share like anything and currently has 9.#8 of the market share whereas Ephone is at 8 market share. Android is being used by @amsung2 I)C2 Oenovo and practically everyone who wants to enter the smart phone market. aturally Android being of ,oogle =nd most valued brand>2 Apple has to be ready for @martphone competition. . .aptop competition * 3acook is obviously the best there is. ut so is ell2 and so is @ony and so is Oenovo. )he competition is ever-increasing in the laptop segments. ell has introduced some beautiful models over the years including the Alienware model. @o2 although Apple as a brand is loved by everyone2 3acook is facing stiff competition from other brands as well. @martphones replacing Epod M En $12 Epod suffered a ma4or decline of #8 in its sale over $1+. (verall2 @martphones have replaced music players altogether because of the various ways that you can utilise music and carry it around. Ience the functionality of Epod is no more uni"ue. =(ther 5(nly music players6 are also finding it hard to eBist in the market>.
http--www.marketing#".com-swot(analysis(apple-
#pple %ro&uct '%ro&uct Mi() Apple (nc. has continued to e:pand its product mi:. This component of the marketing mi: determines the outputs of the business organization. (n AppleIs case# the following are the main product lines/ ". 9. N. J. %. 1. G.
Mac iad iod ihone Apple T@ Apple Patch otware
These Apple products currently available in the market show the firmIs diversification in this component of the marketing mi:. +owever# as part of its product development intensive growth strategy# the company continues to develop new products# such as the Apple electric vehicle# which is under development through collaboration with firms like Tesla Motors. This product mi: shows that AppleIs marketing mi: is e:tensive in terms of product variety to address customersI needs in different areas of their lives.
*itri!ution or %lace in #pple +nc Maretin- Mi( AppleIs marketing mi: involves a holistic approach to distribution# taking advantage of different distribution channels. (n general# the company uses a selective distribution strategy# which involves some degree of e)clusivity that could limit market reach . Apple authorizes sellers to ensure control over this component of the marketing mi:. The following places are included in AppleIs distribution strategy/ ". 9. N. J. %.
Apple tores Enline Apple tore and App tore Authorized retailers Telecom companies 2ulfllment services
Apple 7tores are the most visible places that sell the companyIs products. The online Apple 7tore and App 7tore are also highly visible. +owever# these stores are not the only places in the firmIs marketing mi:. 3or instance# Apple also uses authorized retailers# such as @almart# Target and 8est 8uy. The company also includes telecom companies like ATCT# 5erizon# and 7print# which sell iPhone units. (n addition# Apple uses fulfillment services from companies like Amazon.com and e8ay# through which
third parties sell Apple products online. Thus# AppleIs marketing mi: is comprehensive in e:ploiting different types of online and non"online distribution channels.
#pple %rootion '%rootional Mi() AppleIs marketing mi: includes promotion activities that emphasize the premium image and )uality of the firmIs products. The promotional or marketing communications mi: supports business position in reaching more target buyers. (n AppleIs case# this component of the marketing mi: includes the following elements/ ". 9. N. J.
Advertising ersonal elling ales romotion ublic /elations
AppleIs marketing mi: includes advertising through the companyIs website and Apple 7tores# as well as advertising through other firms# such as technology news sites. The company also uses personal selling in the form of Apple 7tore employees who provide product"specific information in the aim of convincing store visitors to make a purchase. (n addition# the companyIs marketing mi: involves sales promotion# which usually happens at the Apple 7tores. 3or e:ample# some Apple 7tores offer old models at discounted prices when bundled with larger and more e:pensive products. Moreover# the company uses public relations to optimize its corporate image. 3or instance# Apple vents# leaks of new product features# press releases# and e:clusive interviews are carefully implemented to ma:imize positive publicity. Thus# Apple has mastered the promotion component of its marketing mi:.
#pple %rice an& %ricin- Strate-/ Apple uses a premium pricing strategy. (n this component of the marketing mi:# the emphasis is on how prices represent the company and its products# while meeting consumer e:pectations. (n AppleIs case# the premium pricing strateg y involves relatively high prices. This pricing strategy helps maintain the high"end image of the company and its products. Another effect of this pricing strategy is that Apple products attract a smaller market share composed of people from the middle and upper classes. Eonetheless# the company maintains profitability because premium prices entail higher profit margins. Thus# AppleIs marketing mi: is aligned to the compan yIs premium product development strategy. http--panmore.com-apple(inc(marketing(mi)(Jps distribution
App l e ’ sr et ai l s t or esar eah uges uc c es s ,gener at i ngmor er e v enuepers quar ef oo tt hanan y ot herr et ai l eri nt heUni t edSt at es ,i nc l udi ngTi ffany .Dur i ngt hec ompany ’ sl as tear ni ngscal l , CFO Pe t erOppenhei mers ai dAppl e ’ s372s t or escol l ec t i v el ygener at ed$4. 1bi l l i oni n r e v e n u e .
I nt heU. S. ,Appl e’ sr et ai l s t or es ,al ongwi t ht hec ompany ’ sonl i nes t or ef r ont ,s ol d47per c ent o ft h eMa c san d4 0p er c e nto ft h ei Pa dsp ur c h as e db yt h es u r v e ys a mp l edu r i n gDe c emb er 2 01 1a ndAu gu s t2 01 2.Bu tt he yon l ys o l d21per c e nto ft h ei Ph on es .AT&Ta ndVer i z on s t or esbo t hs ol dmor et hanApp l e,wi t h28per c entand2 6per c ents har esofs al es , r es pe ct i v e l y . AndBes tBuyandAmaz on( v i af ul fi l l ment s )t oget hers ol dnear l yasman y i PadsasAppl ei t s el f .
Fr om i t sdi r ec tandc hannel pr i c i ngs t r at egyt oi t sr et ai l andonl i nes t or ef r ont s ,Appl es el l si t s pr oduc t sl i k enoo t herc ompan yi nt hec on sumerel ec t r oni c ssp ac e.I fy o uk no w“ t he c ha nn el , ”y o uk n owt h i si sb ynome an sa ne as yt r i c k .Wh atma k esAp pl e ’ ss al e sa nd c hannel s t r at egyuni que:•Appl enev erdi s count st hr oughi t sdi r ec tc hannel .I tdoesdi s count r ef ur bi s hedpr oduc t sand,ofc our s e,t her ear epr i c ec hanges ,butt her e’ sno“ s al e”pr i c i ng, s ayonahol i day ,f orex ampl e.•Appl ek eepsr e sel l erpr i c i ngs t abl e.Whi l ei t ’ si l l egal t os et deal erpr i c i ng( t oi t scus t omer s ) , Appl es t i l l managest ok eepr et ai l pr i c i ngr emar k abl y s t abl e.I tpr obabl ydoest hatb yk eepi ngdeal ermar gi nssl i m,off er i ngnov ol umedi s c ount s , andk eepi ngt er mscons i s t entbet weenr es el l er soft hes amepr oduc t .•Appl e ’ sr et ai l and onl i nes t or ef r ont sar euni que.The y’ r emor eabouteduc at i onands uppor tt hans el l i ng. The y’ r es i mpl e,ev enaus t er e,wi t hmi ni mal s i gnageandcr y s t al c l earmes s agi ng.The per v as i v ef eel i ngi st hatl ot soff ol k sar et her et ohel py ouandnobodyi st her et os el l y ou any t hi ng.•Appl epr oduc t sar epos i t i onedasuni quec at egor i es .T ot heex t entt hati t ’ s f eas i bl e,Appl el i k esr es el l er st os el l i t spr oduc t sasuni quec at egor i es ,asoppos edt os i deby s i denex tt oc ompet i t or s ,ei t herons t or ef r onts hel v esoronl i ne.Fore xampl e,Bes tBuy onl i nehasas ec t i onc al l ed“ i PadandT abl etPCs . ”The y’ r edi s t i nc tands epar at e.No w,t he s t r at egyofpos i t i oni ngapr oduc tasuni quer el at i v et oc ompet i t or sandmai nt ai ni ngt i ght c hannel c ont r ol andpr i c i ngt omanaget hatpos i t i oni ngi snot hi ngnew.I nf ac t ,i t ’ ssor toft he hol ygr ai l ofs el l i ng.Manycompani eshav et r i edt odoi twi t hv ar i ouspr oduc t sandwi t h v ar y i ngdegr eesofs uc ces s,i nc l udi ngI nt el pr oc es sor s ,Mi c r os of ts of t war e,,Dy s on v ac uums ,andcer t ai n“ pr emi er ”manuf ac t ur er sofwat c hes .I neac hc as e,i tr eal l yc omes downt ot hes amefi v ef ac t or st hatenabl et hathol ygr ai l ofs al esst r at egy :1.Per c ei v edor r eal h i ghdemandandl i mi t eds uppl y2.Uni queands uper i orv al uepr opos i t i onorbr and
per c ept i on3.Per c ei v edorr eal monopol y4.Hi ghenoughmar gi n st os uppor tar obus t c hannel s uppor ti nf r as t r uc t ur e5.Cl ear ,t opdowns al es/c hannel s t r at egyanddi s ci pl i ned ex ec ut i onHav i ngs ai dal l t hat ,t hepr ac t i c al mat t erofmai nt ai ni ngt hepr ac t i c eov eran e xt endedper i odoft i mei sal mos ti mpos s i bl e.
https--mpkGN9.wordpress.com-9:"%-:%-"1-apples(sales(and(channel(strategy(key( to(its(success-comment(page("-
ater sales service
Apple6are= Apple'areX provides additional hardware service and technical support rom Apple, including coverage or up to two incidents o accidental damage per device covered. Apple'areX is available or Apple Patch, Apple Patch port, Apple Patch
emote Access 0echnical Assistance epair *+press eplacement iPhone 9p(ra%e Pro(ram
Apple call center Apple call center has 9:::: telephones, is the world*s largest call center, the incoming calls are more than "$::::: every day and the numbers are increasing. 7t can be seen Apple*s ater(sales service is also one o his strengths 6ustomer oyalty
At a very general level, loyalty is something that consumers may e)hibit to brands, services, stores, product categories, and activities. There are two advantages o customer loyalty programs. Ene is to increase sales revenues by raising purchase levels, and increasing the range o products bought rom the supplier. The other is more deensive SS by building a closer bond between the brand and current customers it is hoped to maintain the current customer base. Phile loyalty programs can have many other peripheral goals S such as urthering cross(selling,
creating databases, aiding trade relations, assisting brand /（public relations ）, establishing alliances, etc.
#pple +nc. is an American multinational technology company head)uartered in 2upertino# 2alifornia# that designs# develops# and sells consumer electronics# computer software# and online services. Apple was founded by 7teve obs# 7teve @ozniak# and Donald @ayne in April 19=< to develop and sell personal computers. $!% (t was incorporated as #pple Coputer, +nc. in anuary 19==# and was renamed as Apple (nc. in anuary ,= to reflect its shifted focus toward consumer electronics. Apple &EA7A/ AAP?' >oined the ow ones (ndustrial Average in March ,1!. $<%
Apple is the world4s largest information technology company by revenue# the world4s largest technology company by total assets#$=%and the world4s second"largest mobile phone manufacturer .$% (n Eovember ,1O# in addition to being the largest publicly traded corporation in the world by market capitalization# Apple became the first N.7. company to be valued at over N7Q= billion.$9% The company employs 11!# permanent full"time employees as of uly ,1! $O% and maintains O= retail stores in seventeen countries as of March ,1<.$1% (t operates the online Apple 7tore and iTunes 7tore# the latter of which is the world4s largest music retailer. There are over one billion actively used Apple products worldwide as of March ,1<. $1% Apple4s worldwide annual revenue totaled Q,00 billion for the fiscal year ending in 7eptember ,1!. $0% This revenue generation accounts for appro:imately 1.,!J of the total Nnited 7tates BP.$11% The company en>oys a high level of brand loyalty and# according to (nterbrand4s annual 8est Blobal 8rands report# has been the world4s most valuable brand for O years in a row#$1,%$10%$1O%with a valuation in ,1< of Q1=.1 billion. $1!%
