Essay Example on Apple Inc: Value Chain & Value-Creating Events

Apple Inc. is an American multinational technology company. It is among one the big tech technology companies besides Amazon, Google, Microsoft, and Facebook. The company develops designs and sells consumer electronics, computer software, and online services. The value chain of a corporation contains primary and secondary activities. Marketing and sales activities that allow the company to sell more products are activities tare that are referred to as value-creating events (Lewis, 2017). The revenue model of the company relies on the integration of content and hardware to drive growth. Primary activities consist of inbound and outbound logistics, operations, sales, and marketing and services. Secondary activities are: infrastructure, human resource management, technology advancement, and procurement (Gorge, 2013).

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Apple Inc. deals in hardware, software products, and other services. The hardware products include the iPhone smartphone, smartwatch, the iPad tablet computer and media player the Mac personal computer, among others. Apple’s software products include; macOS, iOS, iPadOS, watchOS, tvOS operating systems, among others, and the services offered by the company include Apple Store, Genius Bar, AppleCare, etc. (Levy,2020). Dudovskiy (2019) listed some of Apple’s market segmentation, such as appreciating design, quality, and performance of technology products and services over their prices. The company position itself as an exceptional brand offering goods and services with unconventional functions and competencies for additional costs using the mono-segment type of positioning.

Karim (2016) explained how Apple Inc. creates its value elements by creating and retaining its customers. Through advanced technology used by the company, it is in a position to generate a high rate of customers’ loyalty. Advanced technology enables the company to satisfy its customers’ needs with the existing products. It also delivers its new products based on their customers’ experience with the current hardware, software products, and online services of the company. In technology, the ecosystem refers to a group of devices and software that represent a single collective network. Dudovskiy (2019) described the current ecosystem of Apple is a brand that acts as a competitive advantage of the company. Services such as iCloud, airplay, and airdrop, the company begins a task from one Apple device to another, and customers do not download or install anything when operating the equipment. Customers are not forced only to use one tool, but he can connect to multiple Apple products; this is because third-party products are usually not compatible.

The ecosystem is changing by making all Apple’s products within its ecosystem to be compatible with one another. For example, when considering the communication devices, an individual can use iPhone and Mac and connects it to his or her computer so that an individual can receive calls or messages within its laptop even when the iPhone is not near him. Some of the critical elements integrate include; company’s image, perception of status and effectiveness of Apple products, and efficient devices and services when using the two compatible Apple products (Levy, 2020). The purpose of the company is the empowerment of men by making personal computing accessible to every individual. The accessed computing system help change the way people think, work, learn, and communicate. The strategy of the company is to make its customers desire to belong to a community where Apple’s brand personality makes one feel that those who use its brand create a fun and friendly culture. Apple Incorporation puts purpose at the core of its strategy through maximizing its revenue and assets to increase sales and cater to its customers’ existing demand. The company continually innovates and launches new features of its iPads and iPhones (Levy, 2020).

After holding numerous debates about whether Apple was a platform player by strategy or by default since the company nurtures several mutually community dependent partners, the company only focused on making its products. It became a challenge in the market for mobile devices when the company introduced the iPhone, and the device did not have an outside developer software tool to make applications. According to Lohr (2011), the company took a hybrid approach to become a platform player. By innovating and launching new devices, the company by deciding on how an application should behave and look at the methods introduced by suppliers and its partners. The app enables customers to have an easy time in computing, gathering information, and entertainment purposes.

The service elements in Apple’s products include; price place, promotion, people, physical evidence, and process (Bartsch et al., 2017). These elements dictate that the market decision should base on customers’ preferences and needs. These elements work by ensuring that when a customer purchases any Apple product, he or she is entitled to some benefits and satisfaction when using that particular product. The service elements and their importance at any point in time vary within any marketing mix. An example is using a product from Apple Company wit an idea of service element. Product (iPhone), place (outlet locations), promotion (advertisement), price (differentiation), people (customers), physical evidence (device) and process (level of customer’s income).

The current challenge faced by Apple Company is competition, using the five force analysis helps the stakeholders to understand specific factors that determine whether the company can succeed despite other tech companies in the market (Dobbs, 2014). According to the Porters’ model, the five forces that shape Apple’s competition are; competitive rivalry this force examine how the competition is stiff in the market place. The effect enables Apple to know the number of competitors and what each can do. Competitive rivalry shows how customers can look for cheaper products as a preference for Apple’s products. Another force is the bargaining power of suppliers. In this force it determines how much power a business’s supplier has and how much control it has over the possibility to raise its prices as a result lowering business’s profitability.in this force Apple Company is in a position to determine the number of suppliers of raw materials and other resources (Dobbs, 2014). The fewer the supplier, the more bargaining power they have. The bargaining power of customers is another force in Porter`s model. The force determines the power of the consumer, and their effect on pricing and quality. Customers believe that Apple products are expensive; hence buying power is low, resulting in less bargaining power. Another force is the threat of new entrants, which considers how easy or difficult it is for competitors to join the marketplace. The force acts as a competitive advantage for Apple Company since the company holds a strong brand image (Dobbs, 2014). The last effect is the threat of substitute products or services. It studies how easy it is for consumers to switch from the company’s product or service to that of its competitor. It is a challenge since many customers prefer less expensive products from Apple’s major competitors.

The innovation used by the company is creativity that encourages customers to upgrade their devices frequently. It has resulted in increased sales as well as an increase in the profitability level of the company. Studies have shown that Apple Company holds relatively modest shares of international markets with less than twenty percent for smartphones, and four percent for PC’s worldwide. Apple’s customers can be defined as individuals who value style, aesthetics, and function. The customers are valued, making them believe them Apple’s products worth more than those of the company’s competitors. The main issues for the execution of the company’s strategy are; navigating trade uncertainty, battling with Qualcomm, and meeting iPhone unit sales predictions. The aspect of navigating trade uncertainty, there is uncertain9in in tariff policy between the US and China, making the company plans to shift some of its products from China. The issue of battling with Qualcomm where the licensing rate and potent fee vary from one country to another. Where Apple was accused of stealing the trade secrets and selling the obtained intel. On the issue of meeting iPhone unit sales prediction, Apple is shifting away from focusing on the iPhone sales unit.

Conclusion

In conclusion, Apple is planning to invent an end-to-end ecosystem of products and services experiences for both consumer and business use. The above aim can be achieved by continuous innovation and invention and looking at strategies that the company should use to have a more competitive advantage over its major competitors.

References

Lewis, R. (2017). Porter’s Five Forces of competitive advantage. Retrieved from http://ecite.utas.edu.au/122828

Bartsch, C., Grabarnik, G. Y., Shwartz, L., & Ward, C. (2017). US Patent No. 9,613,324. Washington, DC: US Patent and Trademark Office. Retrieved from https://patents.google.com/patent/US9613324B2/en

Dobbs, M. E. (2014). Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review. Retrieved from https://www.emerald.com/insight/content/doi/10.1108/CR-06-2013-0059/full/html

Lohr, S. (2011, Jan. 29). The Power of the Platform at Apple. The New York Times. Retrieved from https://www.nytimes.com/2011/01/30/business/30unbox.html#:~:text=These%20days%2C%20Apple%20is%20a,is%20taking%20a%20hybrid%20approach.&text=It%20all%20works%20better%20together,strategy%20is%20working%20so%20far.

Levy, S. (2020). Apple Inc. American company. Encyclopedia Britenicca. Retrieved from https://www.britannica.com/topic/Apple-Inc/Apple-refocuses-on-key-markets

George, B. (2013). Apple Value Chain analysis. Grin. Retrieved from https://www.grin.com/document/270202#:~:text=According%20to%20Porter%20(2008)%20the,company%20to%20sell%20more%20products.

Koc, T., & Bozdag, E. (2017). Measuring the degree of novelty of innovation based on Porter’s value chain approach. European Journal of Operational Research, 257(2), 559-567. Retrieved from https://www.sciencedirect.com/science/article/pii/S037722171630604X

Dudovskiy, J. (2019 April, 20). Apple Segmentation, Targeting, and Positioning. Retrieved from https://research-methodology.net/apple-segmentation-targeting-and-positioning/#:~:text=Apple%20segmentation%2C%20targeting%20and%20positioning%20represents,core%20of%20its%20marketing%20efforts.&text=Common%20set%20of%20characteristics%20shared,and%20services%20over%20their%20prices.

Dudovskiy, J. (2019 May 2). Apple Ecosystem: closed and useful. Retrieved from https://research-methodology.net/apple-ecosystem-closed-effective/#:~:text=Apple%20ecosystem%20is%20one%20of,advantages%20associated%20with%20the%20brand.&text=Gradually%2C%20it%20will%20come%20to,a%20powerful%20customer%20retention%20strategy.

Karim, A. (2016 September, 20). How Apple Creates Value.By Creating Customers. Intensive investing. Retrieved from https://intrinsicinvesting.com/2016/09/20/how-apple-creates-value-by-creating-customers/#:~:text=Adding%20services%2C%20such%20as%20Apple,increasing%20usage%20and%20satisfaction)%20while