Apple Value Chain Analysis

Introduction

The Apple value chain analysis is a business strategy to evaluate and describe the activities the company performs for product development and to identify areas for improvement to increase production efficiency. We use values chain analysis to reduce costs for production and deliver the most value. It helps companies reduce waste by optimizing efforts and increasing profitability. Apple is one of the world’s leading businesses today, and it is the result of its value chain analysis that helps add value to its final products by identifying those activities where the company can quickly reduce cost or add a difference. The Apple value chain analysis provides a better insight into how the company managed to secure over 90% of loyal customers starting from the Apple-I. Here, we will discuss the primary and support activities of Apple value chain. Also, learn how PDF Agile makes it easier for you to convert PDF reports.

Background of Apple

Apple is the world's leading information technology company, established by Steve Jobs, Ronald Wayne, and Steve Wozniak in 1977 in California. Apple operates as a global designer, marketer, and manufacturer of mobiles, personal computers, portable digital music devices like iPods, and other communication products. The hierarchical organizational structure of Apple integrates product-based grouping. It is the world’s second-largest mobile phone manufacturer with its main products, the iPhones and iPads. Apple leads the IT world with $365.8 billion in revenue. Since its early days, Apple has focused on designing and improving its own operating system, which has led to its current popularity and success. The current CEO of Apple is Tim Cook, who is famous for his effective and quiet leadership practices.

Primary Activities in Apple Value Chain Analysis

The Apple value chain analysis outlines five primary activities essential for a compelling value chain analysis.

Inbound Logistics

Inbound logistics are the primary activities of purchasing, receiving, storing, and managing raw materials that the company gets from suppliers to use as input for product manufacturing. The value chain analysis of apple indicates methods to reduce cost in inbound logistics activities that act as a benchmark for global business efficiency. The way Apple makes supplies compete to reduce costs of raw materials is also a part of Apple value chain. The primary source of value in Apple's supply chain is due to its massive scope in economic scale and business operations.

Operations

The Apple value chain analysis explains how it helps the company focus on its core services and put more resources into research and development that adds to the company's further success. Apple operations also add value to their final products as Apple does not own any manufacturing companies and prefers to outsource its hardware manufacturing to other companies. Apple operates in five operating segments.

America: The America segment is the largest in terms of sales, including North and South America. The sales are on a constant increase in America Segment.

Europe: The Europe Segment includes India, the Middle East, and European countries with more and more increasing sales.

Greater China: The greater China segment consists of Taiwan, China, and Hong Kong. The sales in this segment are going down.

Japan: The Japan segment is stable in sales with no notable changes compared to previous years.

Rest of Asian Pacific: In the rest of the Asian Pacific segment, Apple manages to increase its sales each year.

Outbound Logistics

Outbound logistics refers to shipping manufactured products like iPhones and iPads to the Apple warehouse in California. After the products are in the warehouse, the company ships them to countries in the operating segments within a short period. Apple products' short product life cycle makes their inventory costs much higher. With the Apple value chain analysis, Apple managed to reduce their outbound logistic activities costs in Asian countries resulting in more profits and customer satisfaction.

Marketing and Sales

Marketing and sales are primary activities in the value chain analysis of Apple. One of the reasons behind Apple's shockingly increasing revenue is Apple's marketing and sales strategies to provide the highest value out of reduced cost from various activities. Apple has multiple marketing channels and seven distinguished sectors that mainly focus on sales. Apple sales regularly go up due to its direct and indirect channels as the company is increasing its reliance on related channels to add more enterprise sales.

Services

Apple services are highly responsible for customer loyalty and the best experience with Apple products because the company tries its best to provide the best pre-purchase, during-purchase, and after-purchase customer services. In pre-purchase, customers can use Apple products to check their quality. During the purchase, Apple employees demonstrate the product's features to customers to help them pick the right product. After the purchase, Apple provides trade-in programs where customers can exchange their current device with a newer model with additional payments.

Support Activities in Apple Value Chain Analysis

The value chain analysis for Apple highlights four crucial support services.

Infrastructure

A well-functioning infrastructure of any company includes multiple activities essential for a successful business. A company's infrastructure defines work efficiency, productivity, and critical planning to support its value chain. Management activities like developing strategies, planning, accounting, legal, quality management, and government activities are part of a company’s infrastructure.

Human Resource Management

The key to a successful business is proper human resource management, and that is why it is a vital support activity in the Apple value chain analysis. Human resources management aims to make employees more productive, talent management, and place suitable employees for the right roles and responsibilities in the company. Apple prepares its employees with creative training and development strategies, with handsome pay, compensation, and benefits.

Technology Development

As Apple outsources its hardware manufacturing, it mainly focuses on technology development and research that helped the company maintain its position as the world's leading IT company based on its revenue. Apple products run on their specific operating system and come with other unique properties that the company keeps introducing after spending billions of dollars only on technology development.

Procurement

One of the reasons behind Apple's remarkable success in business is its relationship with its suppliers and vendors because the finished products will reach the customers through vendors, and Apple needs to buy raw materials from its suppliers. Procurement is the activity of purchasing inputs to increase the efficiency of the value chain. Apple does that by maintaining a healthy relationship with its suppliers.

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Key Takeaways

Companies use value chain analysis to create a competitive advantage by identifying the primary and support activities that add value and reduce the final product or service cost. Any company can make its activities more efficient to boost its sales with a compelling value chain strategy. Apple value chain analysis is the best example of how you can make your business more profitable and successful using the correct value chain strategies. PDF Agile is the best PDF editor and convertor, with many creative tools for editing, converting, and compressing your PDF document. It supports multiple formats and comes with an easy-to-use interface.