Operations Apple derives value from its operations primarily through outsourcing. Apple has operations in the Americas, Europe, Greater China, Japan, and the rest of the Asian Pacific, however, only a few models of Mac computers are manufactured in the United States and Ireland, while the rest of the company's products are typically manufactured in Asia (Dudovskiy).Apple outsources the majority of its products to manufacturing facilities in Asia, where the cost of materials and labor is much lower than in other countries the company operates in (Dudovskiy). Outbound Logistics Outbound logistics for Apple consist of warehousing and distributing products once they've left manufacturing facilities. E-commerce is a significant source of value added for Apple because sales conducted in this manner cost less for the company than do sales in their App Store . Because of the importance of e-commerce to the company, Apple has focused on increasing their e-commerce business over the last few years. Now, Apple is the third largest retailer in the U.S. in terms of their e-commerce business, only coming in behind Wal-Mart and Amazon, two discount retailers widely-known for their e-commerce businesses. Apple had e-commerce sales of $12 billion in 2016, which accounted for 5.1% of the company's sales (Dudovskiy). It can also be said that a "greater market penetration" into Asia at large and China, more specifically, is another source of value for Apple (Dudovskiy). This is because many Apple products are manufactured there, and the warehousing and distributing costs are, then, significantly lower (Dudovskiy). This cost reduction can be passed down to the consumer, resulting in an increased competitiveness of Apple products in Asian markets compared to competitors' products, which may not have operations there. Marketing and Sales The following seven sales channels are employed by Apple to bring together their products and consumers: Apple retail stores, Apple online store, direct sales force, third-party cellular network carriers, wholesalers, retailers and value-added resellers. In 2016, sales procured through the company's direct and indirect distribution channels accounted for 25% and 75% of total net sales, respectively (Dudovskiy). Since Tim Cook assumed the position of CEO in 2011, the company's advertising budget has been consistently increasing and is now at an all-time high of $1.8 billion in 2015- the company chose not to disclose its budget for 2016 (Dudovskiy). Apple has been focusing on gaining high volume enterprise sales in the recent years, as described earlier in the SWOT Analysis (Dudovskiy). The company has recently announced several partnerships to be rolled out in the coming years that will hopefully provide an additional source of competitive advantage for Apple.
Service Apple has been known for its exceptional customer service due to the company's commitment to service pre-purchase, during purchase and post-purchase. Apple stores have a great reputation, along with the employees working in the stores, who are usually "young, polite, technically- savy individuals happily willing to demonstrate unique product features" (Dudovskiy). The
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- Spring '17