An effective supply chain management is vital for the success of the firm. In turn, it lies in the deep understanding of what is the company’s target audience and what are the needs and expectations of the clients. A well established supply chain is an effective network between the firm, its suppliers, intermediaries and consumers. Innovation industry cannot adopt a single type of the supply channels, either direct or indirect, as this market niche is rapidly developing and thus must be both, flexible and stable. Hereafter, most of the successful high-tech companies use a mixed channels model (Mohr, Sengupta, & Slater, 2010, pp. 325-327).
Apple, Inc. mixed distribution strategy is perhaps the brightest example of how direct retailing can be successful for one high-tech company, while absolutely inappropriate for another (i.e. IBM, Gateway). It is clear, that distributing computers and other high-tech gadgets through intermediaries is a successful practice used by almost all of the firms in the industry, including Apple, Inc. First of all, it is less expensive for the company; and secondly it allows to cover wider market niche. However, only Apple’s company owned retail stores in six different countries attract crowds of clients, even in the depths of recession (Mohr, Sengupta, & Slater, 2010, p. 326). Besides, Apple reports that they employ 1.6 million people in 20 countries, (including outsourced workers), which allows the company to enroll highly qualified specialist. Most of their manufacturing facilities are located abroad (i.e. China, Taiwan, Singapore, etc), which helps to save on resources and materials (Apple, 2016).
An outstanding success of the Apple’s supply chain management can be explained by the fact that company is not solely technology oriented. They are concerned about offering new opportunities to all people. Moreover, they managed to seize the very moment, when high-tech gadgets became a mainstream, so that is why the company spent so much time and efforts speaking about their every new product launched. Once they became a desired brand, associated with high quality and modern technologies, their reputation appeared to be a cornerstone that grants their further success. Perhaps, that is why, their people oriented strategy is being reflected in more than 2400 Environment, Health, and Safety (EHS) projects launched since 2013 (Apple, 2016).
References
Mohr, J., Sengupta, S., and Slater, S. (2010) Marketing of High-Technology Products and Innovations. 3rd ed. Upper Saddle River, NJ: Pearson Education, Inc. ISBN-13: 978-0-13-604996-8
Apple (2016) Supplier Responsibility 2016 Progress Report. Available at: https://www.apple.com/in/supplier-responsibility/pdf/Apple_SR_2016_Progress_Report.pdf
Response to Claudia Trejos
No doubts that globalization process in the modern economy forces every developing company to upgrade its supply chain management. Therefore, distribution lines, logistics and poduction structure in most cases are divided geographically and structurally so that the company could gain the highest benefits (Mohr, Sengupta, & Slater, 2010, pp. 326). Apple, Inc. is not an exception with its manufacturing facilities located in China, and worldwide distribution channels both direct, like Apple brand retail stores, and indirect, like wireless carriers (Verizon, T-mobile, Spint, etc) and retail stores (such as Best Buy and Wal-Mart). I absolutely agree, with your statement that Apple’s wide distribution channels support not only the company itself, but also create new jobs worldwide, and help their suppliers to improve working standards, as it was shown in the case with the Chinese company Lens that produces the glass covers for Apple (Apple, 2016). However, I would not agree that currently Apple benefits so greatly from the iPhone 4 sales margin. Starting from 2015, their iPhone 6S beat the sales records, crossing the 13 million units point with the average retail price of $600 per item.
References
Mohr, J., Sengupta, S., and Slater, S. (2010) Marketing of High-Technology Products and Innovations. 3rd ed. Upper Saddle River, NJ: Pearson Education, Inc. ISBN-13: 978-0-13-604996-8
Apple (2016) Supplier Responsibility 2016 Progress Report. Available at: https://www.apple.com/in/supplier-responsibility/pdf/Apple_SR_2016_Progress_Report.pdf
Response to Meagan Aguayo
Well developed distribution channels may grant the firm’s success in establishing good relations with its suppliers and clients. At the same time, I absolutely agree that an effective supply chain helps the company to achieve both cost advantages and customer satisfaction. Direct distribution provides the firm with the highest control over their marketing strategy and thus brand creation (Mohr, Sengupta, & Slater, 2010, pp. 325-327). Brand is significantly important for the Aplle, Inc. Therefore, the company adopts a multichannel distribution process.
I also support the statement that Aplle, Inc. is highly oriented on their customer’s needs. As it was reported the firm spent $8 billion on R&D, which results were used to improve company distribution channels and pricing in order to become closer to their clients (Apple, 2015). All these steps make Apple’s supply chain to be ranked the top one in the market.
References
Mohr, J., Sengupta, S., and Slater, S. (2010) Marketing of High-Technology Products and Innovations. 3rd ed. Upper Saddle River, NJ: Pearson Education, Inc. ISBN-13: 978-0-13-604996-8
Apple Inc. (2015) 10-K Annual Report 2015. Retrieved August 3, 2016 http://investor.apple.com/secfiling.cfm?filingid=1193125-15-356351&cik=320193
