About the Company:

Apple Inc., formerly Apple Computer Inc., is an American multinational technology

company based in Cupertino, California. Apple is responsible for designing, developing,
and selling consumer electronics, computer software, online services and personal
computers.

Initially founded by Steve Jobs, Steve Wozniak and Ronald Wayne on April 1, 1976. It
was created with a main purpose of developing and selling personal computers but then
evolved into different type of electronic devices. With its innovation and elegant designs,
Apple nowadays is the world’s second-largest information technology company by
revenue and is in the front-row of mobile market.

What makes Apple special?

The very first thing that comes to your mind when you talk about Apple is Steve Jobs,
who became synonymous with the brand name and as famous as the brand itself.
Steve opened up several new vistas for the company and actually redefined the whole
concept of mobile, during his time. He came up with new and innovative ideas that
would please the voracious minds of new-technology-hungry users all over the world.
Moreover, one of the major contributors to Apple’s success is its dynamic, constantly
changing business plan offering diverse products and creating a demand for the
products itself.

Before making a strategic decision, it is important for Apple to understand how its
activities or products create values for customers. One way to do this is to conduct a
value chain analysis (VCA). Value Chain Analysis “refers to the idea that a company is a
chain of activities for transforming inputs into outputs that customers value. The process
of transforming inputs into outputs compromises a number of primary and support
activities” (Hill and Jones, 2001, p.133). Each value is considered to be a source of
competitive advantage.

Adapting Michael Porter’s Value Chain Analysis Model, we are going to examine and
discover how Apple Inc. made it to the top of the mobile and technology market.
Apple’s Primary Activities
Apple Inbound Logistics

Although the tech giant does not apply Just-in-Time principle in inbound logistics, Apple
supply chain practices is a benchmark for efficiency for global businesses. Apple has
well-integrated suppliers, and they deal with the suppliers directly. Apple has direct
integration with the suppliers around the globe to have significant control over the entire
supply chain management of the company. The Purchase requirements of the Apple will
ensure that it meets the requirement for 150 days (Dudovskiy, 2015). Apple has
reduced the number of suppliers to have better control over the entire supply chain
management. CEO Tim Cook is known for his strategy of getting suppliers to compete
with each other for Apple businesses. Apple sources from US, China, Europe and other
Asian countries. They make the assembly in China. Then they are distributed to the
warehouse. From the warehouse, it is distributed to other distribution centers.
Apple Operations
Apple does not own any manufacturing facilities and prefers to outsource manufacturing
of its hardware to other companies in developing countries, notably China. This strategy
provides advantages such as focus on core competence of the business such as
research and development and designing new products.
Apple operations are divided into the following reportable operating segments:

1. Americas segment includes North and South America. This is the largest segment
for the tech giant in terms of sales. In 2020, the sales in Americas segment increased
by 7% compared to previous year to exceed USD 124,55 billion.

2. Europe segment comprises European countries, India, Middle East and Africa. In

2019 sales in Europe segment had declined by 3% compared to previous year.
However, the situation has improved the following year and in 2020 sales reached USD
68, 64 billion, an impressive increase of 14%.

3. Greater China segment consists of China, Hong Kong and Taiwan. Sales in Greater
China segment has been declining for the past few years mainly due to intensifying
local competition. Specifically, sales have declined by 8% in 2020 and 16% in 2019
compared to respective previous years.

4. Japan Sales in Japan segment did not change in 2020 compared to the previous
year.

5. Rest of Asian Pacific Sales in this segment have increased by 10% and 2% in 2020
and 2019 respectively.

Apple operations are conducted by 147,000 full-time equivalent employees worldwide.

Outsourcing of manufacturing to locations with lower costs of resources is the main
source of value for Apple operations. Specifically, only some models of Mac computers
are manufactured in USA and Ireland and the majority of Apple products are outsourced
to manufacturing units based in Asia.
Apple’s Outbound Logistics

Apple deals with both direct and indirect distribution channels. They account for about
28% and 72% of the sales revenue (Apple, 2014, p. 5). To reduce the overall cost,
Apple is mainly focusing on an efficient inventory management.

The company ships finished products to Apple Stores that are typically located at high-
traffic locations in quality shopping malls and urban shopping districts. Apple outbound
logistics also facilitates deliveries to the warehouses of wholesalers and retailers.

E-commerce sales are rightly acknowledged by the company as a massive source of

value in terms of inbound logistics, because e-commerce is more cost effective
compared to sales via Apple Store. 

Apple’s Marketing and Sales

Apple sells its products through the following seven sales channels:

1. Apple retail stores

2. Apple online store
3. Direct sales force
4. Third-party cellular network carriers
5. Wholesalers
6. Retailers
7. Value-added resellers

The tech giant is consistently increasing the share of sales through direct sales
channels, as opposed to indirect sales channels. In 2020, the company’s net sales
through its direct and indirect distribution channels accounted for 34% and 66% of total
net sales respectively. Apple has been increasing its focus on enterprise sales during
the past few years and CEO Tim Cook announced an extensive reliance on Channel
Partners to further increase the volume of enterprise sales.

Apple Service

Apple is famous for exceptional quality of customer services during all three stages: pre-
purchase, during the purchase and post-purchase. The company maintains Apple
experience centers in major cities around the globe where anyone can use its products
to become convinced about the quality. Apple sales assistants are usually trained and
polite young males and females who are technically savvy and happy to demonstrate
product features and capabilities.

Post-purchase customer service is also impressive with unique iPhone trade-in

programs that allow iPhone users to upgrade their phone to newer models with
additional payment. Customers can return to Apple only items that they purchased
directly from Apple, either online or at an Apple Retail Store. Products can be returned
within 14 calendar days after the purchase.

Apple Stores have emerged as hubs, where customers can go when they are not sure
about something or when something goes wrong. There are cases where customers
had their cracked iPhone screens repaired at an Apple Store for free.

Apple’s Support Activities

Procurement

Since Apple is a member of the Electronic Industry Citizenship Coalition (EICC), it works
to guarantee fair treatment for its workers. In addition, Apple developed an ecosystem of
suppliers to benefits from its strong relationships by keeping them close (Masi B., 2009,
p.13). Apple has reduced the number of suppliers from 150 to 24 suppliers and have
them compete healthily from each other to have better control over the entire supply
chain management. Apple sources from US, China, Europe and other Asian countries.

By doing that, it enables Apple to obtain its products and services within limited timeframe
(Apple Inc., 2012). Apple, occasionally, evaluates its relationships and enhances its
suppliers’ ecosystem if needed. Moreover, Apple introduced a Supplier Diversity Program
which is mainly for supporting any potential suppliers. This facilitates the visibility of these
suppliers and develops the future relationships (Apple Inc., 2012).

Human Resource Management

Apple has better human resource management. Employees are given more preference;
this has improved the transparency of the organization. It has boosted the performance
of the company. The company is making more changes in the human resource
management so that it will enable the company to obtain the best talent and in retaining
them.

Apple focuses on the candidate who is hardworking, loyal and derives every precise
detail perfectly. For adhering its working culture, most of its employees are provided
with training once they joined the company. It has made a “no expense policy” which
inspire employees to perform better than the rest. This organization works in a dynamic
environment that adopts innovation approaches that were later refined into selective
hiring, performance reward through their Apple Fellow Program, and 360-degree
evaluation. The entire team member is competing with each other to innovate highly
advantageous product that makes them self-efficient. Company also created a culture to
identify the person who holds out of the box thinking and led anyone to brainstorm and
about the idea’s changes. This makes Apple to create performance-based opportunities
for their employee whose invented product inspired him to perform better than the rest. 
Technological Development

Apple spends heavily on research and development. Its brand is known for
technological innovation and for the great quality and unique designs of its products.   In
order to maintain its competitive advantage, the brand has to invest a lot in R&D. In
2016, it spent more than 10 billion dollars on R&D and 11.6 Billion USD in 2017. There
are three key factors behind this push: (1) its growing product range, (2) expanding
ambit of Apple’s services and (3) increased focus on the in-house technology
development.

Apple strives to maintain a quick, short new product development cycle. Due to the high
rate of technological development, Apple strives to release a new iPhone once a year.
Selling newer iPhones will inherently limit the sales for older iPhone models once it has
been on the market for over a year.

(PAKITA MO SA VID EVOLUTION NG APPLE PRODUCTS)

INFRASTRATURE

Apple has an unprecedented cash position; in fact, the most cash held by any
technological company (Schubarth C., 2011). It has 97. 6 billion US dollar in cash
(Schonfeld E. , 2012) and this allows the company to internally finance any
development and expansion without cost of capital. Furthermore, Apple is working on
reducing its greenhouse gas emissions that is used in production and transportation by
redesigning its packaging relying on renewable energy (O’Reilly J., 2009). Apple has a
multi-functional structure that is flat to allow more flexibility (Apple Inc. 2012). As well as
casual dress codes to allow effectiveness and to promote quick decision making and
innovation. Human Resource Management Apple is following a lean management style
and the philosophy of “having less is more”.

Apple’s Firm Infrastructure involves:

General Management
Accounting and Finance
Strategic Planning