VALUE CHAIN AND COMPETITIVE ADVANTAGE APPLE INC

  VALUE CHAIN AND COMPETITIVE ADVANTAGE

                                   APPLE Inc.

                  (Based On Theory M.Porter)

                   

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                          Management Logistic

                 HISTORY OF APPLE Inc.

A brief history of Apple Inc.

 Apple Logo Apple Inc. is an American corporation that designs and manufactures computer hardware, software and other consumer electronics. The company is best known for their Macintosh personal computer line, Mac OS X, extremely loyal user-base, iTunes media application and the iPod personal music player. The company headquarters is in Cupertino, California, CEO and co-founder is Steve Jobs and the company boasts 284 retail locations spanning 10 different countries.

Apple I Apple was established on April 1st, 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne to sell the Apple I personal computer kit. Steve Jobs was said to own 45% of the company, Steve Wozniak with 45% and Wayne with the remaining 10%. While Jobs and Wozniak were young with little to no assets, Ronald Wayne was older with personal assets and was scared to put these at risk. This resulted in Wayne selling his share of the company back to Jobs and Wozniak for a reported 800$. Today Wayne’s share of the company would be worth over 3 billion dollars.

Apple has developed a unique reputation in the consumer electronics field. Those who use Apple electronics tend to be enthusiastic about and loyal to the products while those who have no experience with Apple’s products often criticize them as being overpriced.

Perhaps the single most important PR decision made by Apple to date was the production and release of their “1984" commercial. This commercial was directed by Ridley Scott and aired during the third quarter of Super Bowl XVIII. The commercial was modeled after George Orwell’s novel 1984 which depicted a dystopian future where “Big Brother” told people what to think and as a result people, in general, had very little freedom of choice. Some say “Big Brother”, at the time, was meant to represent IBM while the female heroine was Apple. Today many would say that “Big Brother” was Microsoft with the heroine still being Apple, giving freedom of choice back to the people. Regardless of your interpretation of the commercial or your views on Apple as a company there is no denying that the commercial was a major event in the history of Apple and brought some much needed notoriety to the Macintosh line of computers.

The Apple iPad With the release of the iMac on August 15, 1998 Apple was able to put to rest some its past failures. These failures included the first Apple Portable, which was bulky and awkward and the Newton, Apple’s first attempt to enter the PDA market. In 2001, after several years of development, Apple released Mac OS X, an operating system that targeted both consumers and professionals. Mac OS X was a complete redesign from Mac OS 9 and was able to harness the power of UNIX while offering a streamlined user experience with a simplified GUI (Graphical User Interface). The iMac line of personal computers paired with Mac OS X returned Apple to profitability and the release of the iPod portable digital audio player later that year was the icing on the cake. The phenomenal success of the iPod set the stage for future products, including the best selling mobile device in history, the Apple iPhone, the MacBook line of portable computers, and the Apple iPad announced on January 27, 2010.

                                      

Value Chain Of Apple Inc (M.Porter)

1.Primary Activities

• Inbound Logistics

·       Most components are generally available from multiple sources; a number of components are currently obtained from single or limited sources. Hardwareproducts are manufactured by outsourcing partner primary in Asia e.g. Foxconn.

·       Delegate raw materials acquisition – Apple works with its OEM partners todelegate the raw materials acquisition process but provides some supervision forquality control purpose.

·       Automated receiving systems – Apple has implemented sophisticated automatedreceiving systems to speed up the receiving process and reduce facility footprintand storage space requirement.

• Operation

·       Elimination of toxic substances in Apple products. Every product is free of BFRsand other harmful toxins, Apple have also qualified thousands of components tobe free of elemental bromine and chlorine.

·       Products are designed highly recyclable aluminum enclosure.

·       Utilize original equipment manufacturers (OEM) s economies of scale – Appleoutsources production to third party OEM partners to utilize their economies of scale while removing the burden of production management from the firm.

• Outbound logistics

·       Apple used variety of direct and indirect distribution channel, such as retail stores,online stores and direct sales force, 3rd party cellular network carriers, wholesalers,retailers and value added resellers.

·       Apple continue to expand and improve its distribution capacities by expanding thenumber of its own retail stores worldwide in order to ensure a high quality buyingexperience for its product.

·       Economical packing - Apple employed teams of design and engineering experts who develop product packaging that’s slim and light yet protective. Efficient packaging design not only reduces materials and waste, it also helps reduce theemissions produced during transportation.

• Marketing & Sales

·       Apple advertises online, on TV and Throught print ads

·       Apple store have various programmes to promote their products.

·       Apple is juga endorsed by their fiercely loyal customers.

·       Product are sold by apple reseller, throught the apple website and at 194 retail store around world.

• Service

·       Apple care provides extensive customer support around the world.

·       Updaten of software are regularly released.

2.Support  Activities

• Firm Infrastrucure

About 75 percent of Apple facilities energy consumption comes from renewable resources, according to a company-issued sustainability report. In the last two years Apple has increased its use of renewable energy by 50 percent, though the firm's long-term goal is to run its facilities using 100 percent renewable resources.

Environmental advocates have praised the iPhone maker for its advancements towards green energies.

"Apple's announcement shows that it has made real progress in its commitment to lead the way to a clean energy future," said Greenpeace international senior IT analyst Gary Cook.

"Apple's increased level of disclosure about its energy sources helps customers know that their iCloud will be powered by clean energy sources, not coal."

Apple has reported that it has implemented a 100 percent renewable energy policy at its datacentres. The company currently has datacentres stationed in North Carolina, Oregon, Nevada, and California. In April 2012, Greenpeace lambasted Apple for running its cloud storage datacentres in areas which rely heavily on coal power.

Greenpeace says that in order for Apple to reach its goal of 100 percent renewable energy use it will need to work with power providers such as North Carolina's Duke Energy to change the current dirty energy paradigm.

"As it keeps growing the cloud, Apple still has major roadblocks to meeting its 100 percent clean energy commitment in North Carolina, where renewable energy policies are under siege and electric utility Duke Energy is intent on blocking wind and solar energy from entering the grid," continued Cook.

"To show how it can help remove those roadblocks, Apple should disclose more details about how it will push utilities and state governments to help it achieve its ambitious goal in all of its datacentre locations."

Apple's use of renewable energy comes following a pledge the firm made last year to increase its use of eco-friendly power. Last May, the firm started pushing to use more on-site power options at its corporate facilities.

• Human Resource Management

I started working at Apple during the dot-com boom in 1998, and I left the company in 2007. As much as I loved working at Apple, by 2007 I determined that I now had the financial freedom and opportunity to leave the company and begin working on my own projects.

That was because Apple had been very good to me via the stock market. In the time I worked there, the stock price had gone from less than $10 per share (adjusted for splits) in 1998, to $100-plus per share when I left in 2007 -- and it now hovers around $300 per share. And since I still own shares that I bought for less than $10 per share, my investments in Apple have paid off handsomely.

A Culture of fandom

At Apple, it's never, "How long did you work for the company?" but rather, "How many times did you work at Apple?" The Apple attitude seems to infect everyone who works closely with the technology -- and, even after leaving the company, we all say that we still "bleed six colors," in reference to the original six-color Apple logo.

While at Apple, I, like many other employees, moved between several different divisions and jobs. I started at the company as a software engineer in the WebObjects (Web application) consulting division. I then became an inbound marketer for their K-12 school division, where we sold a suite of hardware, called the Apple Learning Hub, to school districts as part of the company's one-to-one initiative to provide one laptop to each student in a district.

I last worked as an engineer at the Apple Online Store -- which was, by far, the most important experience of my time at Apple, since the online store was earning millions of dollars in revenue every day. We would take the store offline before Steve Jobs took the stage to give a keynote speech and update the database with the new products he was introducing. It was always a great learning experience to bring the store back online under the onslaught of Apple fans checking out the new products.

A great working environment

Apple's HR department takes good care of its employees. In my eight years at the company I never once had, or heard of anyone having, pay issues or other administration problems. Working at Apple was mostly a positive experience, with just a few less-than-ideal elements to the job. Here are some highlights:

Can We Talk: At Apple, you could raise issues that weren't appropriate to bring up with your manager to a higher level by posting it to the Can We Talk section of the internal HR website. For example, in spring 2001, the Apple federal office in Reston, Va., was remodeled to look more like the main campus in Cupertino, Calif. The architect in charge of the remodel removed the large American flag hanging on the lobby wall, since it didn't fit into Apple's design. Immediately after the 9/11 attacks, Apple promoted a video on their HR website as they unrolled a huge American flag at 1 Infinite Loop. A quick post to the Can We Talk section pointing out the irony immediately fixed the problem, and the American flag was replaced in the Reston office lobby.

Health insurance: The health benefits are very good at Apple. A couple of people in my office had to deal with life-threatening diseases, either directly or for their dependents, and their total out-of-pocket expenses were less than $1,000 for co-pays and prescriptions.

Career path: My biggest complaint about working at Apple was that there was no career path. While working at a field office, in Virginia, or from home in Southern California (all of which I did), may not be the fast track up the corporate ladder, I noticed no difference when I was working at the main headquarters in Cupertino, Calif. This fact is by no means a "dirty little secret," however. It's simply the way Apple works, as our HR rep correctly pointed out.

Secrecy: Apple's secrecy is comparable to the U.S. government's in terms of "need to know" and compartmentalization. That sometimes resulted in duplicated efforts within the company. While this secrecy is a necessity to keep Apple ultra-competitive, it would have been more effective if open projects could have been presented to the secret teams to see if there was a fit worth bringing the open projects into the mix.

Blogging: As an Apple employee, you definitely get the feeling that blogging about the company is frowned upon. It goes to the extent that if you have a personal blog about an unrelated topic, you don't even want to mention that you work for Apple.

Military service: While Apple does not employ many military veterans, they've gone above and beyond what is required. Reservists called up to active duty are put into a military-leave status and they remain Apple employees while Apple makes up the salary difference between their military pay and their Apple pay until they return.

Toys: It almost goes without saying that working at Apple allows you to use many of their latest products on a daily basis. Apple employee discounts usually fall in the 15 to 25 percent range, making it easy to buy the latest "gotta have" Apple product for friends and family. Over the past five years, Apple has frequently given every employee a gift ranging from the iPod shuffle to the iPhone. Also, before Apple recycles a computer, they give employees the opportunity to take it home. I've probably brought home more than a dozen computers over the years.

Caffe Macs: The corporate cafeteria, Caffe Macs, is the place to eat on campus. The food quality and variety are excellent, whether you're looking for pizza and pasta or sushi and salad. What can't be beat is the level of excitement and electricity in the cafe. On a daily basis, you'll see at least one of Apple's top executives in Caffe Macs, including Apple's CEO, Steve Jobs himself, who seems to show up there once a week.

Overall, there seem to be no end to the great things about working at Apple. Steve Jobs takes tremendous pride that Apple is a California company that creates great products. When working at Apple, you definitely feel like you're a part of a group of people who will make a serious dent in the universe. It's a fantastic place to work, and I hope to return one day.

• Technology Development

Continuing innovation in a small number of key products has been the key to the company’s success over recent years. It has developed an extensive patent portfolio around the touch-screen interface used in the iPhone and iPod Touch. In 2009, it won several patents that allow for simultaneous tracking of “multiple finger and palm contacts” which, according to the patent, should allow for “unprecedented integration of typing, resting, pointing, scrolling, 3D manipulation, and handwriting.” This intellectual property gives Apple a competitive advantage in the development of devices such as the iPhone, iPod touch or even tablet PCs in the future. The company has also successfully rejuvenated its desktop and laptop lines, developing the OS X operating system and switching to more power-efficient Intel processors in recent years.

• Procurment Of Apple Inc

Over the years, Apple has developed an entire ecosystem of suppliers who support our business operations. Our goal, in a nutshell, is to obtain stellar products and services within tight timeframes, at a cost that represents the best possible value to our customers and shareholders. If that sounds like a daunting task, it’s the same one we assign ourselves.

We are proud of the strong relationships we have built with our suppliers, many of whom have been working with us for years. And we are always looking to expand our supplier base to accommodate our rapidly growing customer base. To that end, we periodically review our relationships and add new suppliers as needed.

• Suppliers at Apple

Apple requires each of its suppliers to meet the highest standards for all goods and services. Our requirements include a commitment to rigorous quality assurance. In addition, suppliers must be committed, as we are, to ensuring the highest standards of social responsibility.

The ideal suppliers are those who understand our culture and expectations. We value suppliers who take the time to learn about and understand our business and who look for ways to add value. These suppliers know the importance of making and meeting commitments and delivering the highest quality goods and services.

Our business environment is competitive and fast-paced. Our suppliers must understand this dynamic and be agile and flexible in responding to changing business conditions. Above all, Apple values innovation. We appreciate suppliers who truly understand and share in our challenges, and who help us find the best possible solutions.

• Supplier Diversity Program

We take our social and environmental responsibilities seriously. A good example is our strong and longstanding commitment to a diverse supplier base.

Apple’s Supplier Diversity Program was formally established in 1993; since that time the company has continued growing and supporting the long list of suppliers who participate. Apple actively participates in the program through the National Minority Supplier Development Council (NMSDC), the Women’s Business Enterprise National Council (WBENC), and Veteran–Owned Business Expositions, as well as Supplier Diversity Business Opportunity Trade Fairs around the country.

The businesses we categorize as diverse suppliers are Minority-Owned, Women-Owned, Veteran-Owned, and Service-Disabled Veteran-Owned Small Businesses, as well as businesses located in Historically Underutilized Business regions (HUBZone) and Small Disadvantaged Businesses (SDB).

So how does a business join Apple’s Supplier Diversity Program? That’s simple: You start by completing the online Supplier Registration Form. Following a swift verification and screening process to ensure a good fit between supplier strengths and capabilities and Apple’s current and future requirements, Apple reviews the supplier information. The business then becomes a potential supplier who may be used in the procurement process as business needs dictate. In the interest of encouraging the success of our diverse supplier base, we work with the Supplier Diversity Program participants to help them develop their businesses. This often involves working with a number of organizations that offer training and feedback.

Suppliers who wish to participate in Apple’s Supplier Diversity Program should complete the online Supplier Registration Form so their information can be entered into Apple’s Supplier Information Database (SID). We have included special areas within the form that prompt the database to alert our supplier diversity team and relevant procurement professionals about the availability of qualified participants in Apple’s Supplier Diversity Program. This helps increase the visibility of these suppliers and can improve their potential for engagement.

• Sourcing Process

Apple’s sourcing process is designed to ensure equal and fair treatment of suppliers so that they can fully participate in a competitive procurement process.

We ask suppliers wishing to participate in the process to register with our Supplier Information Database (SID), a secure online database that Apple maintains with regularly updated information on current and potential suppliers. SID enables Apple procurement professionals to access key information about potential and current suppliers, including capabilities, Supplier Diversity certifications, product/service descriptions, Universal Standard Products and Services Classification (UNSPSC) codes, contact information, and so on.

The First Step

The first step any supplier should take in seeking opportunities to do business with Apple is to register with our Supplier Information Database. If your company registers with SID and there’s a need for the type of products or services you provide, an Apple procurement professional can then contact you to explore potential opportunities.

If there’s no immediate opportunity for engagement (as sometimes happens), the information will remain in Apple’s confidential Supplier Information Database for six months or for as long as you continue visiting Apple’s procurement website to keep your company’s information up to date.

Please note that all purchases are made in the competitive marketplace. Submitting your company to SID does not automatically place your company on a “bidder’s list,” nor does it constitute approval of your firm as an Apple supplier or obligate Apple to solicit requests for quotation.

COMPETITIVE ADVANTAGE OF APPLE INC

• Cost Leadership, Differentiation, and Market Segmentation

In his 1980 classic, Competitive Strategy: Techniques for Analyzing Industries and Competitors, Porter simplifies the scheme by reducing it down to the three best strategies. They are cost leadership, differentiation, and market segmentation (or focus). Market segmentation is narrow in scope while both cost leadership and differentiation are relatively broad in market scope. Figure 0

Empirical research on the profit impact of marketing strategy indicated that firms with a high market share were often quite profitable, but so were many firms with low market share. The least profitable firms were those with moderate market share. This was sometimes referred to as the hole in the middle problem. Porter explains that firms with high market share were successful because they pursued a cost leadership strategy and firms with low market share were successful because they used market segmentation to focus on a small but profitable market niche. Firms in the middle were less profitable because they did not have a viable generic strategy.

• Cost leadership

Cost leadership strategy has been highly adopted by Apple Inc in its endeavors of ensuring competitiveness and success in the technology industry. The company’s management has been able to draw policies and strategies that are aimed at ensuring that the company is the lowest cost producer and distributor (Roth 2001: 24). By strategizing on cost efficiency, the success and sustainability of the company is enhanced. By lowering the cost of production and management, Apple Inc has been given golden opportunities on determining prices of its products, thus enhancing its competitive edge. Lower cost of production and distribution has enabled the company to put competitive prices on its products as well as enhancing its gross profit margins (Bowerman and Wart 2011: 63). Some of the practices adopted by the company in executing the cost leadership strategy is through minimization of operating costs, lowering distribution costs, tight control on labor costs as well as reduction of input costs.

• Differentiation

The concept of differentiation has also been widely adopted by Apple Inc in enhancing its competitiveness and profitability. This has been achieved through designing and production of unique products (Furrer 2010: 231). The aspects of advertisement have also been adopted in ensuring product differentiation from competitor products. Despite that differentiation has been a cause of higher costs to the company; it has enabled it to distinguish its products and services from those of competitors. It is worth noting that differentiation has enabled the products of Apple Inc to appear unique, thus fetching higher markets (Ireland et al 2008: 124). Apple Inc has been much conscious about the increased costs following the adoption of differentiation, thus enabling it to maintain its competitiveness.

• FOCUS

Steve Jobs speaks out about apple inc focus "Apple is a $30 billion company, yet we've got less than 30 major products. I don't know if that's ever been done before. Certainly the great consumer electronics companies of the past had thousands of products. We tend to focus much more. People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.

"I'm actually as proud of many of the things we haven't done as the things we have done. The clearest example was when we were pressured for years to do a PDA, and I realized one day that 90% of the people who use a PDA only take information out of it on the road. They don't put information into it. Pretty soon cellphones are going to do that, so the PDA market's going to get reduced to a fraction of its current size, and it won't really be sustainable. So we decided not to get into it. If we had gotten into it, we wouldn't have had the resources to do the iPod. We probably wouldn't have seen it coming."

APPLE SEGMENTING AND TARGETING :

• You're The Target!!!!!!

  Apple is more than just a brand, its a lifestyle, part of growing culture of consumers who are artist, musicians, writers, photographers, and most of all innovators. The firm has positioned itself as a high end brand that offers beautiful hardware designs and also an amazing users experience. Apple targets a market that consist of people from their teens to their 40's that are interested in doing more with their technology than just the usual boring old stuff that other companies offer. Their product lines offer similar products that offer different benefits in order to prevent cannibalization. For example you can buy an 2GB iPod shuffle for $50 or an 160GB iPod Classic for $250; both mp3 players but they are design to satisfy different target markets. Apple has a multi-segment targeting strategy, meaning that they satisfy 2 or more different types of markets for example the young teen who likes to take pictures for fun to the professional photographer who takes pictures for a living. Both examples have one thing in common, the passion for creativity and art that makes the perfect mix with software like the Aperture 3 which offers the ultimate photographic experience.

     I think that Apple is be bringing back the mass marketing approach, they don't really concentrate their advertisements on certain groups of people, they try to include everybody. You can see all the iPod ads posted on the page that are meant to resemble you, see if you can find a silhouette that fits you. Apple is becoming a cult brand that has gained to respect of world wide users who share one thing in common, their love for Apple's innovation. And I say that Apple is going back to mass marketing because when you go in to an Apple retailer you can see people of all ages, cultures, social classes, and colors; like a small scale ethnic melting pot. The iPod has become a symbol of our modern digital music culture, and the iTunes store is now the 2nd largest music retailer in the U.S. Steve Jobs says that "if you make something great than anybody will want to use it", and that model has worked for them because they've never really invented anything but they made what some considered the best technology available; thus eliminating the need for an specific target market, because their products appeal to everyone.

    Apple offers amazing products that include hardware and software that just draw all different kinds of people into the market.( Their major hardware products are displayed in the page.) Software like the iLife '11 which allows you to manage your music, movies, and pictures, the Final Cut in case you want to make a whole length film, or the iWork, make you look at Apple products as essential to your life. Benefit segmentation works in 2 ways, first, it helps you segment your market and second, it advertises your product which makes people want to buy it; and s that's the point right? Apple in one of the most successful firms in the technology industry so however it is that they are segmenting the market , they are doing it right.

• COMPETITIVE ADVANTAGE MY SELF :

• DIFFERENTIATION :

• -        I have many talent in sport : Futsal, Running, Basket, And Volleyball.

• -        Good communication for negotiation

• -        My mouth can make people happy

• -        Have skill for design and concept event

• -        Full Confidence

• -        My words can make some people inspiring

• -        Have soft skill for use computer software

• -        Love indonesian branded