Apple Hbr Case Analysis

Apple has several key advantages in how it manages its supply chain operations. First by buying key components from suppliers in advance they ensure the steady supply of key parts. This risk is also countered by signing exclusivity agreements with some suppliers. In addition, these exclusivity agreements give them an advantage over their competitors who sometimes had to wait for key components due to the large demand from Apple. Another key advantage is that Apple maintains a close relationship with suppliers by working with them to update manufacturing processes and technology.

By the late 1990’s Apple’s initial pathway to growth was running out of steam. The company’s proprietary approach to designing

The information technology industry is very dynamic and extremely competitive. Being an innovator and trendsetter Apple relies on new product development through its research and development division to

Cisco acknowledged that there were initial barriers to the flow of information and the ease of supply operations between them and their business partners who produced products for Cisco’s consumers. They initiated a Supply Chain Management Initiative to improve their operations by automating the supply chain and improving information flow between Cisco and its partners.

Reportedly, analysts mentioned that Cisco’s supply chain structured like a pyramid. Based on Figure 2 below, there were quite a number of contract manufacturers on the second tier who were responsible for final assembly and they were dependent on large sub-tier companies for components such as processor chips and optical gear. And in turn, those companies were dependent on an even larger base of commodity

Supplier is committed to the homeware and hardware industry, with some sharing of the client base.

The competitive advantages realized by Apple have catapulted the organization to the great heights it enjoys presently. The hardware design forms one of the major competitive advantages. Indeed, the products of Apple are elegant and well designed and every vendor concurs that the products have no equal in the market in terms of design. The laptops, desktops and phones produced by Apple are always designed right for the first time and this puts them ahead of the competitors in the market. Another area where Apple has much competitive advantage is marketing of products (Schulze, 2011).

Apple (NASDAQ:AAPL) has emerged as the dominant global manufacturer and marketer of advanced personal computer, desktop and consumer electronics products including the iPod, iTouch and iPhone Series of MP3, tablet PC and smartphone products. Apple's innovative approach to new product development requires intensive coordination and confidentiality on the part of suppliers, as the company will often move quickly from market test to launch in a matter of weeks. The speed and agility Apple moves with is exceptional given its size and the highly competitive nature of the industries it competes in as well (Franke, Schreier, 2010). While best known for its personal computers, MP3 players, tablet PCs and smartphones, Apple is also a leading innovator in the area of systems development and operating systems as well (Apple Investor Relations, 2012).

When Tim Cook was appointed to be in charge with Apple’s supply chain, Apple became one of the leading companies. In 2012, Apple was said to turn inventory every 5 days and that was part of the reason the research firm, Gartner,

In 2002 a 5% decrease of CoGS represents £21.14 million. This means that a company will be expected to spend less on materials, ingredients, and direct labor costs in 2002 than they did in 2001, while expecting to increase sales by 13% or £48.63 million. Such move will put a lot of pressure on the company and may not be best for employees and customers as the wages and quality or quantity of products may be reduced.

But Apple’s product process has held a strong fascination for many over the years as it defies long-held conventions about how it should work for companies as large as it is. While some of these points have been revealed before, there is much here that is new to me. Lashinsky’s compact tome, which is fantastic, goes into detail on every aspect of the process and is well worth a

* In 1981, IBM entered PC market used Microsoft’s DOS OS and microprocessor and will be Apple best rival for the start on 1981. Jobs forced out in 1985.

First, Apple introduced a new OS in 2001. Second, Apple shifted to Intel chips and by the following year all Macintosh line ran on Intel making laptops run faster for less power. The third strategy was the development of proprietary set of applications. The fourth strategy in becoming the “digital hub” was to come up with a new distribution strategy: the Apple retail store, where customers can have a direct use and experience of Apple’s product and software.

Apple’s renowned for their brilliant abiltity to cope with changes in market demand. They strictly control every aspect of the supply chain to ensure that both the distribution and supply-and-demand relationship are near perfect. They use a Make-To-Stock method of Supply Chain Management that allows customers to walk into any Apple Store and make a purchase the same day, which is coupled with an extremely low inventory level that means the system has nearly Make-To-Order characteristics. Apple uses SAP (Systems, Applications & Products in Data Processing), a German Enterprise Resource Planning software, to power the global supply chain and implement a strategy to “purchase raw material and reserve manufacturing capacity ahead of time “ [1] in order to make this possible.

The company appeared to be raising standards slowly- audits of all supplier’s labour conditions were made; relationships with non-complying suppliers allegedly terminated (Heffernan 2013). Senior Director of Supplier Responsibility Jacky Haynes claims that [Apple] learnt that the area of focus most important was within the supply chain, which