Apple Company Analysis
Apple was founded by Steve Jobs and Steve Wozniak and was founded on April 1; 1976 and incorporated in January 3; 1977.Apple Company has existed for 42 years. Steve and Wozniak are the most well-known founders although they got support from a friend called Ronald Wayne who gave them the idea of having iMac, iPhone and iPad which are widely used today. Apple is the largest information technology company in the world and the second largest company of manufacturing of mobile phones after Samsung Company. Apple products have been the most valuable in the world. Apple products can be grouped into three: computer software-which includes Ios operating system and iTunes media player. The software is used to support the Apple hardware. Another type is consumer electronics which include Apple TV, IPAD, IPHONE, Apple watch and iphone, these items generate the highest income in the Apple Company. The third one is online services which include iTunes store and App store for the clients to purchase and view products online. However, Apple Company has challenges regarding competition of market, source of raw materials used, business and environmental practices and also labor practices. Apple has online services which include Apple music, iTunes store, Ios operating system and many more.
Sales of its computers generated a lot of revenue which facilitated to the growth and expansion of the company. Apple was publically known in 1980, and within those following years they shipped computers which featured graphic user interfaces. Apple products are costly, and this became a critical issue because the price was high and the software was limited, this resulted in the competition of power among the executives in the company. Due to the increased market competition of the personal computers, apple-faced many challenges from its competitors who had lower-priced items.
Job shuffles were very common in the Apple Company until in 1997 when CEO-Gil Amelio when he decided to buy NEXT Company so that to bring the jobs back. He started to rebuild Apple Company which led to starting of the retail stores owned by the Apple Company which led to high profitability and success to the company.
Apple supply chain has many challenges which include: Company relies on the partners to obey the supplier conduct and also it depends on the logistical services provided by outsourcing partners. Apple company faces challenges too from the global economy and inventories can become obsolete to go beyond the expected demand. Some re-sellers in the Apple Company may also distribute goods and services from the contending manufacturers. Some of the apple components are currently obtained from the limited sources, and they are not common to the rest of the industries. The supply chain maybe affected by the man-made disasters and natural calamities which can cause damages in the company and also ability to obtain components in sufficient qualities is important in which the company may not fully get them.
Apple supply chain faces many risks and it becomes difficult to overcome them. Although it is globally recognized as the world-wide leader in the supply chain management, the company has been associated with unethical practices like long working hours, suicidal cases which are related with the work and child labor. In 2012 a blogger who was a former student in Cory Kingsbury wrote an acquisition of labor abuses in a supplier factory of Apple located in China which resulted to long shifts in work making the workers restless, suicidal cases, physical injuries and child labor. These accusations led to questioning of the ethics of the Apple Company supply chain and the supporters requested Apple to make necessary changes and improve the working conditions off the workers.
Apple has tried to correct the accusations and started to conduct internal audits to ensure that the supplier behaves well in order to avoid jeopardizing their business. Apple Company published a report known as 2015 Apple Supplier Responsibility Report which gave the results found in the accusations and also gave some updates. By doing this helped the company to win back the trust of their clients because of transparency and revealing the 156 names of their key suppliers surprised the people. Apple Company took the advantage of the negative situation and used it to strengthen their supply chain using social media. Despite the challenges faced by the Apple Company, it is still the leading company. They put more efforts on ensuring the consumers’ interests are first met, outsourcing manufacturing good inventory body and continuing to adapt to the demands of the clients.
Companies can also face financial problems in case of changes and disruptions in the firm. IPhone key supplier said that they were shipping fewer products than the expected. Hon Hai Precision Industry Co. said that the products were of low quality which made the company to deploy fewer units of the iphones to the clients globally. The issue of quality affects the supply chain management and it requires the company to provide solutions so that to reduce losses and alleviate risks. The solutions come as a result of using technology to connect all people taking part in the company especially the managers and advocating for effective communication and information from all the branches of the companies.
Terry Gou the chairman of Hon Hai Industry said that the demand is very high but it is difficult to meet all the demand of Apple Company. After the launching of iPhone 5, Apple Company has faced some challenges which include delayed delivery of the goods and services to the clients making the products to be scarce in the market. Apple may face the problem of not meeting the buyers’ requirements in future which will be very competitive from other firms especially on the Smart-phones. The Hoi Hai Precision Industry Co. is experiencing stress from the labor bodies in the world due to delivery issues with the iPhone 5 this puts a lot of pressure to the workers especially in China. Gou emphasizes on environmental friendly workplace. Supply chain management helps the Apple Company to ensure it is on the right track and avoid getting into risky businesses.
Apple has been facing the supply constrains because as a result of coming up with a new brand it requires them to have new materials and this may be challenging because the workers are inexperienced or do not have the knowledge of working with the new parts. This slows down the manufacturing process because they will not be able to move with the same speed and meet the standards that Apple Company needs. Inadequate training for the employees in case of new materials which require advanced ideas in order to handle them effectively. If he Apple Company does not offer proper and equal training to all its workers it faces serious delay in manufacturing.
Apple Company is required to cooperate with its workers for a good output and help its employees especially the suppliers with a good training so that to produce quality and quantity of the products needed. Initial low volume production –we got cases of clients praising an item which manufacturing Apple watch is different issue because it is a new product issues may arise. Some commodities may have supply issues and suppliers may prefer to market the item in the low seasons than the high seasons like Christmas. By doing this it helps them to test the market in order to know when the items are on high demand to enable them increase the production volume. Apple company has put much effort in Apple watch so that to overcome the challenges and if they if will be unable to overcome them they will have to use short supply to bring demand.
A flourishing sourcing strategy needs a proper understanding of a company’s policy. Available resources are expected to meet the policies made. There are four sourcing strategies which are used today, they include: out sourcing, in-sourcing, single sourcing and multi-sourcing. Out- sourcing is the process by which a company giving the supplies the authority of distributing goods and services that were earlier provided within the premises or internally. Out sourcing involves substitution where the replacement of production and internal capacity by that of the dealer. In-sourcing is the process by process goods and services are internally developed. Single sourcing it is the process whereby the purchased part is supplied by one seller. Most of the manufacturing companies prefer having one supplier in order to build a close relationship with other suppliers. These relationships foster good cooperation and reliability. Multi-sourcing is the procurement of the product from many self-governing suppliers. The companies can use it to facilitate strong competition among the suppliers so that to attain superior quality and lesser prices.
Multisourcing is a discipline that promotes the blending of the IT services and the businesses from internal to external providers according to the business goals. This engages many providers, different types of products and different methods of delivery. Multisourcing was introduced in 2005 by market research firm known as Gartner although it has been in the market from 80s. Multisourcing involves many supplies who are controlled by one main contractor who ensures the client’s needs are met. In Multisourcing moving suppliers is easier and faster just in the cases where the something is not working out properly and seems to fail, one needs to render small part only and not the whole service. This is the most suitable because the clients will have the freedom to interact with many suppliers since they are not restricted to one supplier.
It makes companies to be flexible which paves a way for them to make improvements where necessary and makes the suppliers give their level best and maximize their potential so that to meet the standards of the clients. Companies are able to be keen on working hard for good output in order to reduce overdependence on the sole suppliers for an extended time. The clients are privileged to meet and practice business deals with experts in all fields. When clients and experts team up they create a healthy environment hence resulting to increased quality of the provided products and raises the working standards of the people involved. The company may gain experience and more information of different suppliers and their competitors and they are able to do a comparison between third party providers and internal-service organizations making them able to narrow down the best and work towards producing goods of the best quality.
Multi sourcing promotes innovation due to interaction of different suppliers and sharing of ideas between the small and medium sized firms .It provides multiple procurement channels of products due to many suppliers and interaction of buyers and sellers helping them to analyze the prices of the product and the interests of the buyers. Drives the up competition, driving down prices which makes one consider the services offered, location, derivable dates and prices this makes one to minimize the indirect and direct spending. Displays the company’s interest and commitment to the economic growth of the community, which is brought up by creating employment at the local level and engaging the society in the business. Allow access to a whole different network because it makes the suppliers to get into new markets fast and have new customers hence upgrading the business due to increased market.
Multisourcing has limitations like: Getting effective communication and information is a bit challenging and can bring risks to the company. The competition between the suppliers may not be able to trigger the market and produce equal cost saving as volume leveraging and low order volumes results to less bargaining power. The lower the company suppliers vest interests in the business, the less active they will be during urgent cases. There is more overhead involved in management, contract negotiation and the process execution in dealing with many suppliers. In multi sourcing, providing goods and services is done under supervision and sometimes it is time consuming. In case of emergence of problems in the company it may be risky and costly and they are forced to offer low prices to its products.
In the single sourcing there are the benefits gained by both the manufacturers and suppliers. In the field of administration there is no importance of reviewing the bids from many suppliers and also it is easier to rationalize accounting and identification of systems. There are few contracts to negotiate and the negotiating process should be done often. Telephone calls made to the suppliers are minimal and the blanket purchase orders minimize paper work. The inventory is low because the supplier derivers small amount of the products. Improved product quality because the company works with the employer to improve the quality of the products and also the short period between the delivery of the products and its usage helps the discovering of new items. Access to new technology where by the supplier may share its technology and take part in designing new items.
The supplier benefits also because there is large amount of products sold to few customers and manufacturing is easy because the customers gives an insight in to the firm production plans. The production capacity is well utilized and reduces the use of paper work. There is the reduction of the inventories of the finished goods and the production costs are low. It is easy to identify and track down problems and affected products in the firm. Single sourcing faces challenges like: it is difficult for the buyer to know the competition levels because it focuses on one company and one source and the buyer may not be able to always persuade the suppliers to accept the orders. A number of suppliers’ maybe discouraged due to the competition of the businesses and there are risks in case there is a catastrophic event, where one is bought by a competitor due to financial problems.
Sole-trader is a business which is mostly referred to as small business or micro business. Some of the examples of the sole trader firms are decorators, electricians and many more. They use different methods like using word of mouth, doing domestic households and others may set up a limited company under the required legislation. Sole proprietor is a business which is owned and managed by one person. Sole trader has benefits like: one is in charge of daily and strategic decision making and also has no staff or workers to pay. Starting a business is very quick and easy and all the financial data including profits and losses made are private. No annual accounts to prepare and there is minimal red tape, rules and regulations compared to the other companies.
Sole trader has limitations like: One is responsible of all the liabilities in the firm and it may be challenging in bidding, accepting and fitting into larger contracts. A sole trader is forced to buy in ideas and information from expects of that field in case he don’t have and it becomes difficult to scale the business alone without people to support. There are no workers employed hence it becomes tiresome due to overworking, in case the sole trader gets an accident the business may experience delays or collapse. It is difficult or the sole proprietor to leverage power due to the small size of the business.
Outsourcing helps the specialization and labor reallocation of the Apple Company with a number of suppliers but Apple has to face some risks like low wages experience in China. Apple has some outsource suppliers who help it to increase the bargaining power so that to have high profits and low cost of production and also the multiple suppliers help in quick decision making and problem solving enhancing more flexibility and adaptability of the company. New supplies invest more in the Apple Company making it fasten the development and improve the quality of goods. Apple company has many suppliers who are required to met and obey the code of conducts, understand their culture, meet the expectations, be flexible and also learn and understand the needs o the company.
Quality is the act of something like a product meeting the requirement of the consumers hence a systematic process is carried out during manufacturing of the products to good quality when developing a good or service. Jonathan Ive said that Apple Company focuses on quality products not money. He emphasized that their goal was to make grate products and it was only through that they could make money and said that making something new will require so much energy and have many challenges. Steve Jobs Company was built of the ideas that goods should improve the lives o the users. The products should be elegant and should work effectively but above all their usability and quality is what important. Apple never rushes to publicize the products so that to be the first in the market and their products becomes public in the market because of the way they function. Apple does not sell their products based on specifications but it is based on the experience.
Cost is the amount to be paid or given so that to get a product or a service in a business. Cost is mostly paid in money form for the materials, time, effort, resources and risks incurred. Cost is the amount used by the company in the production sector. Apple CEO Tim Cook said that they never had a motive to sell a low-cost phone but instead they wanted to sell a great phone and have ways to reduce the costs. According to Macworld, Apple has maintained its popularity on high-priced goods and also Apple uses the minimum advertised price strategy which prohibits selling of a product below certain amounts. Apple aims at producing premier products and charging a premium prices.
Dependability is the level at which an item is capable of performing the needed functions at any time according the specified time. Dependability ensures consistency in the workplace. Apple company views the dependability of a person which includes suppliers in the company so that to get good productivity. Having dependable supplier creates good relationships to the customers and fellow co-workers increasing the company productivity. Apple company products can be depended on by the clients because they are made of high quality and they are durable.
Flexibility is the ability the company activities like production processes to cost effectively varies its outputs within a certain range and within a given time. Apple Company has been able to adapt easily according to the needs of the modern world in terms of network flexibility and flexible working. Flexibility helps the company to solve the problems fast and also easy management of the firm. The suppliers should be flexible in case of any changes experienced in the company for smooth running of the business.
Reference
Bidgoli, H. (2010). The handbook of technology management. Hoboken, N.J: John Wiley & Sons.
Brase, C. H., & Brase, C. P. (2017). Understandable statistics: Concepts and methods.
Coyle, J. J. (2013). Supply chain management: A logistics perspective. Australia: South-Western Cengage Learning.
Handfield, R. B., Giunipero, L. C., Giunipero, L. C., Handfield, R. B., Patterson, J. L., Monczka, R. M., & Monczka, R. M. (2016). Purchasing and supply chain management.
Kim, W. C., & Mauborgne, R. (2015). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Massachusetts: Havard Business School Publishing Corporation.
Slack, N., & Lewis, M. (2017). Operations strategy.
Sollish, F., & Semanik, J. (2011). Strategic global sourcing best practices. Hoboken, N.J: Wiley.
