Apple Inc.: Managing the global supply chain Case Solution
Apart from this, Apple also have a strong logistic system. It formulates the logistic strategy by incorporating forward and backward logistic both, making it the best choice of the consumers.The company while pursuing the logistics strategy in the supply chain, operates through DHL and other three courier as the main logistic partners. It develops the partnership with the logistic so to get the premium service in reaching the market. In addition, Apple also develop the supply chain strategy by reaching the customers and businesses directly opening up the Apple stores and offering the franchising rights to different suppliers, increasing the market reach and penetration while making the production efficient.
This has allowed the company to develop strong competitive advantage in the markets since the effective supply chain management and the hold and control over its functions allows the company reaching the market timely before the competition, and by controlling the demand and supply of the product along with the control over cost, it allows the company to fulfill it promises and its adherence with the business strategy.
- Over the period of time, from 2012 to 2014, the share price of Apple is on the decline, which has depicted the low revenues and low level of operations during the particular period.Though Tim Cook has reassured the business cycle performance with new product launch in the market, the BXE team is concerned over the dropping share price of Apple.
- Since Apple has always been practicing controlling the backward and forward business integration and supplier relationship, the high control on supplier capacity at the time of demand has exhausted some of the supplier since they are unable to offer the service to other players in the market, making them dependent on one client i-e Apple. This has reduced the bargaining power of the supplier and has reduced the profit margin. Analyzing this, many of the suppliers have started dealing with Apple on the limited productions scale, which on one hand has increased the cost of logistics and production,while on other hand has increased the overall supply chain cost.
Competitive Analysis of Apple supply Chain
Apple has a very strong supply chain management. It deals in the market and manages the supply and demand of the product though well-developed technological software’s timely JIT and improves the efficiency of the production in timely manner.This allows Apple to reach the market efficiently and also enables it to hold the competitive edge in market by procuring the raw material or technology before the competition.
In addition to this, Apple has also developed the closed and well-knitted relationship with the suppliers.This has allowed the company to maintain a strong control over the production facilities and also the quality of the products. Also the close relationship and development of supplier ecosystem also allows Apple to negotiate the terms and the productions capabilities to meet the demand. This practice of the supply chain allows Apple to mold the supply chain operations, offering high flexibility to the supply chain, and hence strong and efficient reach to the market, keeping the customers captivated with the brand.
Also, while pursuing the supply chain strategy in the market, the company developed a franchising model in about 160 countries.This has allowed the company to reach to the customers and businesses with out incurring any cost. However, here again in order to maintain the quality and service offered, the company has opened different apple stores in the busy markets to offer the customer first hand experience of the product, developing market awareness and re inforcing the competitive position side by side.
Lastly, Apple has a strong logistic system.This allows the company to manage the inventory cost and the transportation cost effectively. While managing the logistic, the company has developed the partnership with DHL, ORS as the courier partners to manage the freight.In doing so,Apple acquires certain quota in the organization to access the premiums service and hence reached the markets and stores before Samsung or any other brand.This develops the competitive advantage in the market and offers a fist move advantage to the company,while on other reinforces the company’s brand image and brand value in the customer mind.
In addition, to the forward logistic, the company also maintains the backward logistics.This includes calling back the defected items back to the company without customer reaching for the company. This characteristic of the Apple supply chain has offered it’s the competitive advantage in maintaining customer trust and loyalty with the brand.Also, it has allowed the company to fulfill its business strategy of offering innovative solutions to the customer that linger in the daily life. Hence through effective backward logistics the company itself calls back the defected or damaged product to the customer in a fixed time. Developing strong, market value and customer convenience leading to high brand efficacy and brand advocacy in the market……………
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