Analysis Of Apple According To Value Chain Analysis Marketing Essay

This assignment examines Apple according to value chain analysis. For proper study of this organization according to value chain analysis one must understand what value chain analysis is. The concept of value chain analysis was introduced by Michael Porter in the 1980s. Most of the businesses and organizations do have some activities or processes that add to value of that organization. When these activities are linked together they form value chain for that organization. Generally chain of these activities includes components such as purchasing procedure, product manufacturing, distribution and marketing.

Apple has completed thirty years in the market. It has been one heck of ride for organization. This thirty year journey has been full of ups and downs. And that’s pretty obvious with innovative organization like Apple. Leader of this organization Steven Jobs has been responsible for Apples rapid progress. Several successful products have been launched by Apple. But on several occasions they had to bare huge losses. Apple was struggling badly to survive during 1996-1997. Within 13 years share value of apple rocketed through skies and 2010 was miraculous for Apple as share value of Apple went ahead of Microsoft. This has been fairytale to say the list. (Singh et al, 2009)

Apple rightly gives all the credit to its ipod in single year of 2005 y 32 million ipods were sold figure like these never been herd before. (Griffin, 2007)

Value chain analysis played important role in Apples progress. Apple never played pioneer in the market they always have been excellent second movers in the market.

Apple always tries to find drawbacks in other products and then they tend to introduce their product which is free from these drawbacks. (Grant, 2005) For example, in earlier days there were excellent music players available in the market but they all lacked one important factor that was portability. People ware not comfortable using products with limited facilities like walkman. (Haberberg & Rieple, 2008) People were looking for a portable music player with considerable storage capacity and excellent music quality. Apple ipod satisfied all those needs, it was a portable music player with excellent music quality and large storage capacity. No wonder sell of ipod broke all records and had earth shattering following. (Karki, 2008)

We can also see brilliant use of value chain analysis incase of Apple when they provide substitution for their own products. Apple introduces such a wide range of products, because of this; possibility of consumer moving towards other products gets reduced considerably. (Monczka, 2009)

Apple is did exceptionally well in value chain analysis due to factors mentioned below;

Inbound logistic, where primary operations are controlled which includes activities like, receiving the materials from suppliers, storage of this material and the way it is handled inside any organization.

Operations, in this section process related to production and services are handled. Apple gains loads of ground in this factor. In case of apple production and services are so complicated and vast in nature that many subdivisions are created for distribution of work. (Apple Inc. Strategic Management Analysis, 2008)

Outbound logistics, where end product is provided to common users, distribution system of any organization should be excellent to do better in this department (Grimm, Lee, & Smith, 2006). In this sector Apples stores which are devoted only for Apple products are excellent examples. Where not only distribution system is up to mark but product monopoly also plays its part.

Sales and marketing, Apple score heavily in these sectors because of their aggressive campaigning, slick looking products, creating heavy buzz in the market during launch of new product, and long range of products. Apple always has been seen innovating new products according to user’s requirements and to understand requirements of users in authentic manner Apple consistently carried out some rigorous market surveys, made accurate predictions, and then produced products which fulfilled consumer’s requirements. (Martin, 2009)

Complete service, complete service always has been forte of Apple where they have certain provisions which work excellently for their growth such as user have to use Apple software if they are using any Apple gadget. This not only develops product monopoly but also increases products base and increases consumer’s loyalty. (Wood & Murphy, 2002)

Strategies Used by various companies for competitive advantage

Some of the IS/IT strategies used by various companies to gain competitive advantage are mentioned below: (Inside CRM Editors, 2010; 12 Effective Strategies Apple uses to Create Loyal Customers, 2007)

Store for only Apple products

Apple always has been troubled by big box staffers, due to this Apple always found it difficult to introduce or demonstrate new and unique products which were different from the existing crowd in the market. Need to deal with this problem introduced concept of Store for only Apple products where products are only devoted to Apple. Apple could introduce any product according their convenience in these stores.

Providing complete solution for users

Companies like Microsoft are known for providing complete solution for users regarding all products and supporting systems.

Attractive campaigns

Pepsi always believed in aggressive marketing. They consistently pushed for strong identification within youngsters. Popular faces and attractive advertisements are main marketing features for company.

Wide range of products

Groups such as TATA are known for wide range of products. Their products complement with each other and they compete with each other too. TATA provides substitution for its own products. TATA electronics is not that popular but vehicles from TATA group are extremely popular. TATA can build consumer relation for their not so products taking help from their popular products.

Artificial publicity

Users can experience the buzz around every Coke product launch. This can be created by selective and deliberate leak of information and their competition with Pepsi. Coke deliberately spreads news that helps to increase speculations and hype about Apple products.

Educating consumers

Hewlett-Packard deliberately sells their products to schools and universities. Due to this students from very young age get exposed to products. Being famous for its “Q” logo, they get comfortable with all the Hewlett-Packard interfaces. Hewlett-Packard indirectly invests in their future costumers by these strategies. (http://www.nytimes.com)

Customer satisfaction

Cisco is known for their deep and extensive market research. They know need of the customers well in advance due to such researches. They provide exactly those products which are needed in the market and will be popular all across the board. (http://www.cisco.com/)

Getting away from dissatisfaction

When customer purchases any product he doesn’t really contacts customers care unless he faces any problem. Customer bothers to contact manufacturers only when he is not satisfied with the service or frustrated by billing or other administrative procedures. By

Outsourcing customer care to other companies, FedEx has managed to getaway from all the negative vibes. (http://fedex.com/gb/)

Maintaining consistency with products

When Nokia launches any new product in the market, it makes sure that it is not drastically different from earlier products. All the Nokia products follow some basic architecture, that’s why after getting familiar with one Nokia product customers find it easy to handle every other product. This is fantastic way of retaining customer loyalty. (www.nokia.com)

Consistently innovative approach

Samsung always has been innovative in their approach. It has been seen that architecture of Samsung products is consistent, its portfolio is not. Samsung always tried their best to gauge customer requirements well in advance and keep producing new and innovative products for them. (www.samsung.com)

Slick looking products

Smart looking product has been the USP of Motorola. Due to products with their good looks all of these have been harmoniously popular in youngsters. (www.motorola.com)

There are other examples of companies using IS/IT strategies to gain competitive advantage. Companies such as power giant ABB, financial big house Canadian imperial bank, house hold name like Canon, oil exponent such as Indian oil, vehicle giant Fiat, bae systems, one of the most influential bank in the world is Bank of china, Aviation pioneer Boeing are prime examples of companies doing excellent job using IS/IT strategies.

Technological Changes in various companies over the Years

No company is as good as Cisco in fields such as server networking and virtualization.

Company has made rapid progress in technologies such as, storage networking.

Modern techniques such as Tele presence and universal gateways are features of Cisco.

Video and content delivery is also one of their technological brilliance. Microsoft is also known for its technical progress over the years. People can see the difference in every version of their operating systems. Each version tries to get over the flaws of previous version

Einfochips Limited It was formed in the year 1994 in Ahmadabad. It’s the leading silicon supplier and authentication services, fixed system solutions and IP cores.

Einfochips has developed IPNETCAM which consists hardware and software for the surveillance IP camera. The hardware consists of intelligent object recognition algorithm tracks that helps identify the moving objects and software helps to differentiate between the human and the vehicle. (www.einfochips.com)

CI India is the leader in the e-procurement and e-sourcing industry. It helps organizations to change their whole buying cycle from flex to payment. They use the web technologies to get rid of the paper work processes where by organizations can take control of spending, improve their supplier and inventory management and minimize the time consumption on the whole supply processes. (http://www.c1india.com)

Via Technologies is one of the China’s leading note book processor manufacturer which in June 2009 introduced their new Tongfong S30A 13.3″ thin and light processor which engage high performance. It also has a high power efficient VIA NANO U2250 central processing unit along with combined VIA V*800 MPS and distinct s3 graphics chromes for HD videos. HD audio and a HDM guarantees that Tongfong customers will be able to enjoy the media content in the best form possible. (http://www.via.com.tw)

. Company like Albertsons is a well known name in food industry. Company deals with products such as, bakery, dairy, deli, frozen food, and meat. Company has gone through loads of technical changes in food preservation and storage processes since 1939. Alcan is the second largest primary aluminum producing company in the world. Company has immensely benefited through gradual progress in processes such as, anodes, automotives, food packaging and foil making and their techniques. American electric power is one of the largest electric power companies in the world. Since this company is formed, due to extensive market search and gradual changes it has reached fortune 500 list.

AMR is one of the largest airline companies in the world, this company always looked for customers comfort and facilities. Engineers in AMR concentrate their efforts providing due comfort and convenience to their customers and work according to that. (http://www.aa.com)

Central Japan Railway graduated from coal engines to bullet train in really small time span that requires extremely sound technology and Central Japan Railway always complies with that.

Apple inc. was founded in 1976. But Apple managed to achieve their best performance during first fanatical quarter of 2009 they managed record total revenue of $8.16 billion and net profit of $1.21 billion. On January 27, 2010 Apple launched their most anticipated large screen ipad , which had tablet like shape. Apple managed to sell more than 300,000 units of this ipad till April 2010.

Scope of Improvement

Companies which sell premium products, costs shouldn’t be that important for them. These companies should concentrate on primary goals such as availability, Speed, capacity management rather than cost. These organizations have to strengthen resiliency in their supply chain. Industries should be prepared for physical disasters, disaster management, this capability generally lacks even in leading industries. Companies can improve their customer care services everything can’t be outsourced. These organizations also can improve in areas such as Accountability through business integration.

CONCLUSION

In this assignment value chain analysis of an organization was discussed. Apple Inc. previously known as Apple Computers was chosen for this assignment. Apple had its ups and downs, today share value of Apple went ahead than software giant Microsoft. This would have been considered as impossible dream few years back. But Apple found its way through all these obstacles and went quickly at the top; mainly due to providing enough attention to value chain analysis and efforts of fantastic leader like Steven Jobs.