Home' MHD Supply Chain Solutions : MHD Mar-Apl 2016 Contents Acquisitions focused on big data, mapping
technology, display production, digital
publishing, and voice technology. Examples:
PA Semi, a semiconductor-technology
company, whose team went on to develop the
proprietary chips used in iPhones and iPads;
Siri, a voice-recognition start-up; and a series
of mapping start-ups that formed the basis
of Apple iMaps. Beat Electronics, "so we can
continue to create the most innovative music
products and services in the world.”
Tim Cook's acquisition strategy brings to Apple:
• Forward innovation: consistent innovation
across all the products.
• Potential customers: bringing in customers
using the Apple ecosystems.
• Ability to compete with competitors in
technology: putting apps in Android Systems.
Competing on capabilities
Apple’s move to Apple2, to iPhone, to
iTunes and the App Store gave it the ability
to overtake Blackberry with the innovative
features of the iPhone and the best of
Apple’s strength is the ability to sell its
mobile phone at a profit and succeed in all its
capabilities. Apple’s capabilities ensure that:
1. The capability-led transformation will succeed
with a clear business outcome.
2. The value chain will be endowed with the
ability to gain market share and increase
quick product innovation and introduction.
3. The reduction in time-to-market is ensured by
the capability-led transformation.
Apple’s value chain under Tim Cook
The keys to Apple's value chain is based on
The design stage encompasses product
design and includes research in raw materials,
the way the design is manufactured, and how
the distribution network would impact upon the
The integration of the processes at Apple
ensure that Design - Procurement - Production -
Global Distribution - End User are integrated.
In the ‘target segment’ analysis, Apple’s
unique selling point is to market to those
customers who look for customer value
proposition, resulting in great customer
Apple’s recurring revenue model is highly
successful: the company generated $70bn
(2014) through replacing devices and
upgrading subscriptions. More than 40% of
Apple profits were generated from existing,
returning loyal customers.
The differing strategies of
Steve Jobs and Tim Cook
The table below illustrates the difference in the
leadership and strategic direction between the
These strategies augur well for a company
like Apple in the different stages of its lifecycle.
We believe that Tim Cook's strategy will bring
Apple forward in the midst of intense compe-
tition, and the main direction of Tim Cook is
intensive technology acquisition.
Up to May 2014, Apple had successfully
acquired 24 companies. The companies
included big data, mapping technology, display
production, and digital publishing. The strategy
will add value to the company and also fend off
strong technology competitors, as the landscape
is very fierce in the technology war. This will
further result in Apple being able to expand and
improve the features of existing products, and, at
the same time, develop new products.
The consolidation of
the Apple model
Based on the earlier discussion of Steve Job’s
and Tim Cook’s strategic directions, this is the
model that Roger Lee has developed following
the analysis of the future strategic opportunities
for Apple Computer.
As Figure 1. illustrates, the integrated supply
chain strategy is an important part of the model,
bearing in mind that Tim Cook was the senior
vice president of logistics and supply chain
before he became the CEO of Apple Computer.
Integrated supply chain strategy
For Apple to be successful, it must consider the
integrated supply chain model. Owing to high
levels of seasonal demand during the December
shopping season, Apple has focused on out-
sourcing its products so that there is a ready
pool of suppliers.
The suppliers are of top-notch quality, and
replenish Apple’s stocks under a continuous-
flow supply chain model. This fast supply chain
model can help Apple to anticipate demand
and also help in the synchronised sales and
operations planning (S&OP) process.
Apple develops only a few strategic products,
hence it can use ‘standardisation’ of raw
materials and achieve economies of scale
for cost reduction. Apple can thus sustain a
quick turnaround owing to a fast product life
Figure 1. Model of strategic opportunities for Apple Computer.
Strategic alliances with other techno companies.
Disruptive technology acquisition.
Building an economy of eco-systems in Apple products.
Forward innovation that brings potential customers.
Supply chain effectiveness.
Competing on capabilities using Apple's strong cash position.
Strategic conversion of technology and consumer products.
Develop Apple's value chain proposition.
Simplicity Quality Speed to market
Vertical Integration Competitive Advantage
Operations & Marketing
Implementation & Distribution
MHD SUPPLY CHAIN SOLUTIONS — MARCH / APRIL 2016
SUPPLY CHAIN 41
Links Archive MHD Jan-Feb 2016 MHD May-Jun 2016 Navigation Previous Page Next Page