Business
Part I. Apple Inc. customer expectations
When customer purchases something even as simple as a piece of candy, the customer always expects value for their money and more. Value and satisfaction makes up the most important things that customers or clients need when walk into a business. These expectations reflect the most basic needs of customers that businesses are expected to meet. Apart from getting the most out of their money, customers often look forward to being served with utmost accuracy, speed, and efficiency. Talking about value, customers are also on the look out for products that are both high quality and competitively priced (Anderson, Fornell and Rust, 1997). Companies such as Apple Inc. dedicate specific strategies in order to meet the aforementioned customer expectations and needs, which ensures continuum of success of the brand.
Apple Inc. is among the most admired and widely successful brand in the world. The company was able to continue it momentum of success because of the operational strategies employed to meet customer needs. For example, Apple has established several facilities that are reasonably accessible to its customers through customer-dedicated applications integrated into their products. Investments were made to improve applications and customer support lines to be closer to their customers. Applications such as iTunes, App Store and Apple Website were constantly upgraded according customer preference, which brings about integration of customer-oriented strategies into the company’s total quality management process.
In terms of TQM (Total Quality Management) strategies, Apple Inc. exercises strict controls over user experience and product design, simplicity with sophistication are the qualities that the company are always concerned about. This strategy worked for Apple’s advantage because it greatly elevated the brand’s product quality. Benchmarking is among the tools used to ensure the effective implementation of its TQM. In addition, tighter product security measures were implemented to secure the product’s exclusivity to Apple’s approved third party products. However, such strategy appeared to have gone too far because automatic updates performed by Apple devices due to TQM pushes the end user to abandon older versions of the same device because updates incapacitates the older devices although they are still in optimal condition.
On the other hand, TQM was able to provide Apple Inc. an overall effective approach to integrate its methods, principles, and practices in framing the organization’s goals for success. TQM models employed by successful companies such as Apple encompass elements that enable understanding of customer needs. It consists of the process that focuses on collecting, analyzing, and acting upon the information pertaining to customer’s change in behavior. The TQM cycle starts at planning process, which involves interpretation of the acquired data regarding the customer. The trends and changes in market preferences are key to the formulation of the second stage, which is process management strategy. The next stage of the process is the integration of process improvement and participation from all segments of the business. In general, TQM process enabled Apple Inc. to meet its customer’s needs because the approach constitutes a way to understand the customers behavior. In return, the understanding of customers behavior provides clue to the organization how to make improvements of the product in order to make it more appealing to the larger market.
Part II. United Parcel Services
The United Parcel Services Inc. or otherwise UPS. Incorporated in July 15, 1999, the company is among the largest package delivery service provider in the world with an average of 4.1 billion packages delivered to 8.8 millions customers in over 220 countries and territories as of the end of 2012 (reuters.com, N.D.). In addition, UPS posts revenue of US$54.1 billion as of 2012 from its 2,868 facilities including its headquarters in Atlanta, Georgia, United States (UPS, 2012). Since the company is largely engaged in package delivery services, it decided to expand into other segments of the industry including logistics and transport, warehousing and supply chain solutions. Supply chain is the process that involves activities of the organization that requires design, make, delivery and use of products and services (Lambert, Stock and Ellram, 1998), which is detrimental to UPS business. It is made up of six components namely leverage, communication, efficiency, innovation, risk management, and continuous improvement.
These components were integrated to the company’s supply chain strategy from which the company’s operational strategy was tailored. UPS leverages on the implementation of performance management plan to improve the odds of success. Furthermore, performance tracking during the implementation period enables a more cohesive and well-aligned organization. Performance management also incorporates recognizing employees achievement in fulfilling their role in achieving the company’s success goals (UPS, 2005). However, there is an issue in initiating this approach because measuring performance management takes time to conclude. Predicting the odds of success at the point of implementation is like running an experimental strategy in which the chance of achieving the goal depends on the ratio between what works and what went wrong sides outcomes of the plan.
A strategic management plan would work best or at least managing its performance outcome would constitute more positive results if there is will be contingency measures that will mitigate the perceived failures during the plan execution. Mitigating the risks as they occur during the implementation process would regulate its persistence, which will ensure higher success probabilities. The other core element of UPS supply chain strategy is efficiency. On this area, UPS thought of outsourcing services that are not within the scope of its competencies. Meaning, in order to assure the customers with the best services, the company will sources it out such as customer service management. This strategy assures the company that although customer service improvement is beyond the company’s core competency it can still provide excellent customer service by outsourcing it. The only pitfall from this strategy is that outsourcing takes away the personal connection between the customer and the brand. More often than not, outsourced customer service representatives do not convey the same dedication to helping UPS customers because although CS representatives carry the name of UPS in servicing the customer, they are still technically under the BPO management.
Therefore, immediate resolutions, level of expertise on the product and genuine intentions to help the customers is not the same as compared to CS representatives working directly in UPS. This problem can be mitigated by looking at the next component of supply chain, which is communication. Executing a strategic plan should include constant communications between the organization and its external partners. Internal and external communications should be in-synch to ensure that the internal and external operations of the company are working on the same phase (UPS, 2005). Consistency is the key in this area because just like the promise of delivering a pizza on time. UPS must also demonstrate the same consistency in terms of delivery time most particularly because the delivery services of UPS covers an entire planet in which synchronization is paramount to its fulfillment of brand promise. Therefore, communication is detrimental in ensuring a successful supply chain strategic plan. Going back to outsourcing, if UPS implements the plan to outsource to save cost, the company should ensure a direct communication to the BPO service provider regarding updates about the product rates and change in product policies.
When it comes to innovation, UPS have employed the use of tracking tools that provides real-time information of the deliveries such as RFID (Radio Frequency Identification). This tool enabled the company to increase its tracking capability of the items being transported and able to minimize package lost or misdirected. Furthermore, the use of more sophisticated GPS equipment provides the company and its transport segment a more efficient way and higher accessibility to the customer’s location during package delivery. However, these innovations also have their own downsides such as RFID, which is not supported in some countries and territories. The efficiency of the RFID technology only works if there are radio signal receivers in the majority of areas that UPS serves. For instance, secluded port areas where no RFIED receiver systems were installed would not be able to make real-time update of cargo locations including time and date of arrival and dispatch updates to the central monitoring units. In addition, the lack of wide implementation of RFID receiving systems would increase the risk of cargo misplacements.
This problem introduces the risk management element and improvement elements of supply chain. The imminent risk of not meeting delivery schedules or losing the customer’s cargo during transport encompasses the major risks that UPS is striving to mitigate and improve though streamlining operational strategies. For example, the company offers negotiable rates on compromised cargos for large volume transport. In addition, the company also remodeled their rate table in consideration to value of local currencies. However, this strategy poses a problem to revenue achievement due to disparities in currency value in relation to dollar inflation and deflation in the global exchange market. In addition, the cost of operations varies according to country since there are more than two thousand facilities that UPS put up around the world. This problem can be mitigated by focusing on the strength areas of the business and intensified marketing strategies in higher geographical market areas.
The above chart represents the market size of the company and revenue per segment. It can be observed that UPS has its market majority in the United States and its domestic market as its primary sales generator. Given the simple data from the chart, it is apparent that UPS has a greater potential in its local market in the United States. Therefore, financial risk management inflicted by moving exchange rate and cost of fuel can be mitigated by focusing on strength areas of the business and cut operational measures smaller markets. In addition, the market size also reflects even higher potential for the company to increase its foothold on its local market by implementing operational improvements. For example, UPS can further dominate the local market and increase its current market share by introducing better local rates and better improving it’s delivery service time. If a regular package delivery time from west coast to east coast takes about 2-3 days, UPS can further improve it by making it a day early as scheduled.
References
Anderson, E. W., Fornell, C., & Rust, R. T. (1997). Customer satisfaction,productivity and profitability: Differences between goods and services. Marketing Science, 16(2), 129-145. Retrieved from http://bear.warrington.ufl.edu/centers/mks/articles/CustomerSatisfaction.pdf
Lambert, D. M., Stock, J. R., & Ellram, L. M. (1998). Chapter 14: Essentials of supply chain management. In Fundamentals of Logistics Management. Boston, MA: Irwin/McGraw-Hill.
Reuters.com (n.d.). United Parcel Service Inc (UPS.N). Retrieved November 6, 2013, from http://www.reuters.com/finance/stocks/companyProfile?symbol=UPS.N
UPS (2012). 2012 Annual Report (4724). Retrieved from UPS Inc. website: http://thomson.mobular.net/thomson/7/3275/4724/
UPS (2005). Supply chain strategy the importance of aligning your strategies. Retrieved from ups-scs.com website: http://www.ups-scs.com/solutions/white_papers/wp_supply_chain.pdf
