Apple Value Chain Analysis

Value Chain Analysis

Before making a strategic decision, it is important for Apple to understand how its activities or products create values for customers. One way to do this is to conduct a value chain analysis (VCA). VCA “refers to the idea that a company is a chain of activities for transforming inputs into outputs that customers value. The process of transforming inputs into outputs compromises a number of primary and support activities” (Hill and Jones, 2001, p. 133). Each value is considered to be a source of competitive advantage. In the analysis, the company is being examined exclusively.

SUPPORT ACTIVITIES

Infrastructure Apple has an unprecedented cash position; in fact, the most cash held by any technological company (Schubarth C. , 2011). It has 97. 6 billion US dollar in cash (Schonfeld E. , 2012) and this allows the company to internally finance any development and expansion without cost of capital. Furthermore, Apple is working on reducing its greenhouse gas emissions that is used in production and transportation by redesigning its packaging relying on renewable energy (O’Reilly J. , 2009). Apple has a multi-functional structure that is flat to allow more flexibility (Apple Inc. 2012). As well as casual dress codes to allow effectiveness and to promote quick decision making and innovation. Human Resource Management Apple is following a lean management style and the philosophy of “having less is more”.

Also Case Study will describe why Apple Inc. is a very successful company.

That is Apply intentionally understaffing in order to be more productive and innovative (Sullivan, J. , 2011). Apple, also, has a selective hiring process to attract talented employees. Moreover, Apple offer a generous employee benefit program; as a result, pulling and retaining the industry leading those talented employees to promote the company (Masi B. 2009, p. 13). Technological Development Apple spend enormous amount of money on its Research and Development in order to push innovation further; thus stay ahead of competition. According to figures published in Apple’s 2012 annual report, R&D expenditure hits 3. 4 billion US dollars which is nearly 40% increase than 2011 (Brodjanac D. , 2012). Apple as well protects its invention and innovation worldwide by filling patent. Procurement Since Apple is a member of the Electronic Industry Citizenship Coalition (EICC), it works to guarantee fair treatment for its workers.

In addition, Apple developed an ecosystem of suppliers to benefits from its strong relationships by keeping them close (Masi B. , 2009, p. 13). By doing that, it enables Apple to obtain its products and services within limited timeframe (Apple Inc. , 2012). Apple, occasionally, evaluates its relationships and enhances its suppliers’ ecosystem if needed. Moreover, Apple introduced a Supplier Diversity Program which is mainly for supporting any potential suppliers. This facilitates the visibility of these suppliers and develops the future relationships (Apple Inc. , 2012)

PRIMARY ACTIVITIES

Inbound Logistics Apple has a partnership with OEM in order to reduce development time, production, material and manufacturing costs. However, Apple supervises the entire process to control its quality (Francisco T. , 2011). Operations Apple outsourced to various Chinese manufacturers in order to employ its economy of scale; as a result eliminate the burden of production management. Apple, also, cooperate with other companies including HP and Samsung (Sherman E. , 2012). Furthermore, Apple designs its products in-house to eliminate production cost (Masi B. 2009, p. 14). Outbound Logistics Apple’s products are being delivered directly to its retail stores around the world to minimize inventory cost. To trim down shipping costs, Apple’s designing team developed packagings that are slim and light yet productive (Apple, 2012). Marketing and Sales Television commercial, online ads and print advertisements campaigns have been successful in promoting the Apple’s products and services. Apple has a branding strategy that is emotions’ focused, humorous and simplicity.

The ads theme is about lifestyle; innovation, imagination and aspiration (Masi B. , 2009, p. 14). In addition, Apple has a secretive strategy concerning new products or services in order to create suspension and publicity. It, also, sells its products to schools and universities; thus creating an exposure for the product or the service (Inside CRM, 2009). Services Having a great customer experience is fundamental priority for any businesses. Apple is a great example of customer focused; it believes that customer loyalty is a great strength to the company.

Apple Genius Bar is one of its main services where customers get the best face to face support (Apple, 2012). Moreover, customers are always welcome for free consultation concerning any issues. Apple, in addition, offer one year warranty and customers then have the choice to purchase an extension warranty (Masi B. , 2009, p. 13).

Reference

• http://www. scribd. com/doc/24134877/Strategic-Analysis-of-Apple-Inc-Brian-Masi Procurement
• http://www. apple. com/procurement/ Technological
• http://www. decryptedtech. om/news/apple-increasing-their-investments-in-research-and-development. html HR
• http://www. ere. net/2011/09/12/talent-management-lessons-from-apple-a-case-study-of-the-worlds-most-valuable-firm-part-1-of-3/ Infra.
• http://www. bizjournals. com/sanjose/news/2011/07/21/apples-cash-pile-up-16-to-762b. html
• http://techcrunch. com/2012/01/24/apple-97-6-billion-cash/
• http://www. inboundlogistics. com/cms/article/how-green-is-apple/ Marketing & sales
• http://www. insidecrm. com/articles/crm-blog/11-effective-strategies-apple-uses-to-create-loyal-customers-53510/ Operation