Apple 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 Apple value chain analysis. Figure 1 Apple Value Chain Analysis Apple Primary Activities Apple Inbound logistics Inbound logistics primary activity refers to receiving and storing of raw materials for their consecutive use in manufacturing. Apple works with hundreds of suppliers around the globe and maintains a highly sophisticated supply-chain management as illustrated in Figure 2 below. Figure 2 Apple operations roadmap[1] Although the tech giant does not apply Just-in-Time principle in inbound logistics, Apple supply chain practices is a benchmark for efficiency for global businesses. The multinational technology company’s purchase commitments typically cover its requirements for periods up to 150 days[2]. CEO Tim 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 CEO in 2011. The main sources of value in Apple inbound logistics relate to the economies of scale due to the massive scope and scale of business operations as discussed below and the development of strategic relationships with suppliers. Moreover, Apple Inc. exercises an immense bargaining power in dealing with its suppliers and as a result, the company is able to secure cost advantage in the purchase of resources. Apple Operations Apple does not own any manufacturing facilities and prefers to outsource manufacturing of its hardware to other companies in developing countries, notably China. While this strategy provides advantages such as focus on core competence of the business such as research and development and designing new products, it also has disadvantages. Specifically, outsourcing makes the company brand image vulnerable to labour issues at supplier facilities which has been the case with…Apple Value Chain Analysis
Tuesday, February 23, 2021
Research Methodology
Apple 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 Apple value chain analysis. Figure 1 Apple Value Chain Analysis Apple Primary Activities Apple Inbound logistics Inbound logistics primary activity refers to receiving and storing of raw materials for their consecutive use in manufacturing. Apple works with hundreds of suppliers around the globe and maintains a highly sophisticated supply-chain management as illustrated in Figure 2 below. Figure 2 Apple operations roadmap[1] Although the tech giant does not apply Just-in-Time principle in inbound logistics, Apple supply chain practices is a benchmark for efficiency for global businesses. The multinational technology company’s purchase commitments typically cover its requirements for periods up to 150 days[2]. CEO Tim 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 CEO in 2011. The main sources of value in Apple inbound logistics relate to the economies of scale due to the massive scope and scale of business operations as discussed below and the development of strategic relationships with suppliers. Moreover, Apple Inc. exercises an immense bargaining power in dealing with its suppliers and as a result, the company is able to secure cost advantage in the purchase of resources. Apple Operations Apple does not own any manufacturing facilities and prefers to outsource manufacturing of its hardware to other companies in developing countries, notably China. While this strategy provides advantages such as focus on core competence of the business such as research and development and designing new products, it also has disadvantages. Specifically, outsourcing makes the company brand image vulnerable to labour issues at supplier facilities which has been the case with…
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