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Livia Hejlova - Robert Gerstenmaier - Di Chang - Mohammed Ali A Alsharidah - Oleksandr Sydorenko
Agenda:
Introduction 5 Performance objectives 4Vs model Apple Supply Chain Purchasing Distribution CRM Conclusion
Apple: Introduction
Production Computer HW, computer SW, consumer electronics, digital distribution Area served: Worldwide Number of employees: 73 000
Number of locations 393 retail stores in 14 countries (as of August 2012) online Apple Store online iTunes Store
Worldwide annual revenue of $156 billion in FY 2012 (ended 30.9.2012) Publicly traded company extreme market influence (NASDAQ: AAPL, NASDAQ100, S&P 500)
Livia Hejlova - Robert Gerstenmaier - Di Chang
Cost Optimization of supply and assembly - global trade (Example: iPhone: 34% Japan, 17% Germany, 13% South Korea, 3,6% China,27% Others Assembly in China) Product cost ~ 170 $
Flexibility Due to problems with main supplier Foxconn, Apple places 60% of iPad mini orders at the competitor Pegatron
Speed 8 weeks delivery time for iPhone 5 Dependability Unpredictable demand, no stock and Quality Control Program affect Dependability Quality Strict quality control Program affects Speed (Example: material problems with iPhone 5 scuffgate leads directly to production stop at the supplier Foxconn)
Livia Hejlova - Robert Gerstenmaier - Di Chang - Mohammed Ali A Alsharidah - Oleksandr Sydorenko
Apple: 4 Vs model
low low low low Volume Variety high high high high
Variation
Visibility
Volume Huge amount of products and additional facilities sold worldwide (17 million iPads, 26 million iPhones, 4 million Macs in year quarter ending 30.6.2012) Variety Products of the same product category (desktops, laptops, netbooks, music players, smart phones, servers, monitors, software, tablet computers, television box sets) Variation Demand for products increases rapidly in times of new product launching; (Different price sensitivity iPad as consumer entertainment niche is more price sensitive than iPhone as a communication device) Visibility Apples strong branding secures good visibility of their products worldwide
Livia Hejlova - Robert Gerstenmaier - Di Chang - Oleksandr Sydorenko
2. Korea Flash memory storage and a portion of LCD panels 3. Taiwan Touch screens, casings and passive components 4. Japan Critical materials and core technologies 5. China Low added value acoustic components and battery modules
Added value (margin distribution): Approximately 58% of the sales price of a typical iPhone 4 goes to Apple
Livia Hejlova - Robert Gerstenmaier - Di Chang - Oleksandr Sydorenko
Apple retail stores network (gives it a major advantage in distribution, direct customer experience of brand values) 393 retail stores in 14 countries (August 2012)
Apple Online Store (products, accessories) Resellers Retail Stores (AT&T, Best Buy, Wal-Mart) Online Resellers (computer- and consumer electronics focused e-shops) Mobile services providers carriers (play a gateway role in choosing and distributing handsets) Apple Mac-expert staff provided to selected resellers' stores Co-branding or distributing Apple's products and services with other companies (e.g. HP was selling a co-branded form of iPod and pre-loading iTunes onto consumer PCs and laptops)
Livia Hejlova - Robert Gerstenmaier - Di Chang - Oleksandr Sydorenko
Significant Stores Located in prime locations of major cities (New York, London, Paris, Shanghai, etc.), amazing architecture, staff trained not to sell rather to respond to customer queries and provide solutions to customers problems Offering The Genius Bar specially trained staff offer one-on-one training on how customers can maximize their use of a Mac or their iPhone
Branding Apples stores as a part of the companys branding strategy, reflecting the companys now-popular minimalist design philosophy and offering clutter-free zones
Apple Store visit Experiencing a stimulating, no-pressure environment, Discovering more about the Apple family, Trying out the company's products getting practical help Feeling of inclusiveness by a community that really understands what good technology should look and feel like - and how it should fit into people's lives
Livia Hejlova - Robert Gerstenmaier - Di Chang - Oleksandr Sydorenko
Staying on the top of the American Customer Satisfaction Index for eight years, topping its own record from 86 to 87 on 2011
Varied products
Consistency New innovations Attractiveness
Apple: Conclusion
While the iPhone and iPad, including most of their components, are manufactured offshore, the most value from these products goes to Apple.
References
Offline
Research and Practical Issues of Enterprise Information Systems II Volume 2: IFIP TC 8 WG 8.9 International Conference on Research and Practical Issues ... in Information and Communication Technology). 1 Edition. Springer.,2007. Slack Nigel/ Chambers Stuart/ Johnston R, 2010. Operations Management. 6 Edition. Pearson College Div. Linstone, H.A. and Turoof, M.(1975) The Delphi Method: Techniques and Applications, Addison-Wesley.
Livia Hejlova - Robert Gerstenmaier - Di Chang - Mohammed Ali A Alsharidah - Oleksandr Sydorenko
References
Online
Channeling Steve Jobs: http://ezproxy.napier.ac.uk:2334/docview/1024159625 BROWN, B., 2011. Surveys find Apple most admired, most satisfying company. Network World (Online), . Available: http://go.galegroup.com/ps/retrieve.do?sgHitCountType=None&sort=DASORT&inPS=true&prodId=EAIM&userGroupName=napier&tabID=T003&searchId=R1&resultLi stType=RESULT_LIST&contentSegment=&searchType=AdvancedSearchForm¤tPosition= 1&contentSet=GALE|A267972228&&docId=GALE|A267972228&docType=GALE&role= http://www.thestreet.com/story/11731645/1/heres-why-the-next-3-months-will-be-hugefor-apple.html http://www.saleschase.com/blog/2012/04/09/apples-innovative-distribution-strategyrevealed/ http://www.saleschase.com/blog/2012/04/17/how-apples-branding-strategy-made-it-anicon/ http://www.apple.com/supplierresponsibility/ http://cmuscm.blogspot.co.uk/2012/02/two-sides-of-apples-supply-chain.html http://www.ausmt.org/index.php/AUSMT/article/view/155/136