Essay about Apple Inc. and Company

APPLE INC. VALUE CHAIN ANALYSIS

Apple Inc., a consumer electronics firm, is more perceived as a marketing company than a technology company. This turnaround is brought by the experiences of the company throughout the years by learning with its business mistakes (Gardiner, 2008), retaining the core principles, and expanding operations through extensive partnerships. Written here are the analyses of the firm’s primary and secondary activities that led to a transformative, profitable company outwitting its competitors’ moves. The primary activities of the company includes the inbound logistics, operations, marketing and sales while the secondary activities includes purchasing, human resource management, and technology. Apple Inc.’s dedication in its own manufacturing operations starts with the right moves in the acquisition of raw materials. For the longest time, Apple Inc.’s principle of “doing it their own” had led to failed attempts to seize the market due to overpromising and under delivered market offerings (Apple Inc., 2008). Recently, the company realized that outsourcing raw materials that are core ingredients in a product that is otherwise already available in the market is a step to their competitive advantage. The acquisition itself saves the time that is dedicated to research, creating a prototype, and testing. Although it cuts down the cost in research, manpower and technology, the major setback is the high procurement cost of the supply. The company then turns to look at a long term perspective where the technology can immediately return the profit at a short period of time. This is of course a gamble to the company who is starting this strategy. Thus, the company further enhanced the technology that became their competitive advantage against the other offerings in the market. Hiring supplies externally raises the issue of control and risk that is equated to a cost to the company. Since the company will be relying heavily on its suppliers, it had developed a control system called Suppliers Code of Standard that can measure manufacturing standards, labor related issues, sourcing of raw materials, and ability to meet deadlines. The company also requires its suppliers to understand the fast-paced and dynamic operations needing immediate response time and attention. Further to this, the company takes a step further by providing training to its suppliers’ supervisors and staff such as academic and life skills (Apple, Inc., 2008). This helps eradicate the additional costs that Apple will incur if it produces its own chips or new software and is converted as a value to customers. The expertise of a supplier is also an advantage since they focus on the quality of a certain product that serves as a raw material in the packaged hardware that Apple Inc. manufactures. One move made by Apple is the partnership with Intel that reaped rewards not just for profit but for the delivery of products. Before, the company’s chips called PowerPC and supplied by Freescale (previously Motorola) and IBM took years to integrate the technology and offer to the public. With Intel, the transition period commenced earlier than expected and had its PCs available to the market before target date. This move is an advantage for the company where most of its competitors are already using Intel chips and its latest Intel Core Duo during that time (Apple Inc., 2008). This helps the Apple Macs at par with its competitors and added value to its customers. Apple Inc. also made use of vertical integration where it purchased NeXTstep, a company with the technology of a multi-tasking operating system. This helped in the development of the now available in the market, Mac OS X. This venture, helped lower down the cost of developing the same technology and is now readily profitable and multi-branded (Leopard and Tiger) in the market (Apple Inc, 2008). Another example is the licensing of Microsoft’s open software for Mac.

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