APPLE INC.

APPLE INC. VALUE CHAIN ANALYSIS

Apple Inc., who doesn't know this company led by Tim Cook? Apple Inc. is a
multinational company based in California, United States, is engaged in electronics producing
Smartphones, Computers, Music Players, Set-top Boxes, and Digital Content marketing.
Apple was initiated by the late Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1, 1976
to develop the Personal Computer (PC). First established as a company under the name Apple
Computer Inc. On January 3, 1977, and on January 9, 2007, it changed its name to Apple Inc. to
reflect that the company's focus is not only on selling computers but on consumer electronics as a
whole.
Apple is the IT company with the largest revenue as well as the largest smartphone manufacturer
in the world after they successfully shipped 75 million units of their latest flagship smartphone
products, namely the iPhone 6 and iPhone 6+. Apple became the first American company to be
valued at more than $ 700 billion in March 2015. Apple employs 72,800 permanent workers,
establishes 437 retail stores in 15 countries and operates the largest retail stores for music,
movies, books and applications, namely the iTunes Store and the App Store. .

VALUE CHAIN ANALYSIS:

New Product
Idea Generation Designing/ Product Distribution Sales and Customer
Funding Creation Marketing Service

Idea Generation

Apple has successfully perfected their innovation value chain. Starting from generating ideas for
new products. Who would have thought of embedding a fingerprint sensor on their smartphone if
it wasn't Apple who started it on the iPhone 5s product. Apple also started the trend of processors
with 64-bit architecture for smartphones. Apple has proven to be a frequent trendsetter in the
smartphone industry even though they are not the first to spark it. After the idea was sparked,
their next step was to design through the resources they had, which this design has always been
their trademark for because Apple's sensiri image is a producer of premium products.

Technology and Product Design

As we said before, product design is Apple's main strength. Let's take a look at their product line
now starting from the Mac Book Pro, Mac Book Air, iMac, iPhone, Apple TV, etc. they are all
famous for their good quality and high prices. Owning an Apple product will make you an
elegant, tasteful person. To maintain their image as a producer of premium products with elegant
designs, Apple spends around 5-9% of their revenue on Research and Development, a field
which is now headed by Johny Ive.

Suppliers

It becomes an advantage when a company produces its own components for the products they
sell. Apple produces all the components themselves, except the processor, for their products.
They manufacture hard drives, monitors, chassis, and all kinds of accessories. For processors in
Apple's desktop line, they use products from Intel Corporation, while for processors in their
smartphone line, they submit their production to Samsung Electronics, which is their biggest
competitor, to produce them. This is none other than the consideration that Samsung is the best
smartphone microprocessor maker today.

Production

Like other technology companies, Apple handed over component assembly to FoxConn, the
world's third-largest electronics assembly contractor. What is the reason why Apple handed over
its product assembly to Foxconn is that labor costs are still very cheap in Taiwan, the location of
Foxconn's largest factory.

Distribution

Initially, Apple, like other conventional companies, partnered with other parties to market their
products. However, in 1997 Steve Jobs abolished the system because it was considered to
reduce profits because the company also had to pay these marketers. Instead, Apple sells its
products directly from their website and in 2001 the first time the Apple Store was opened in
America, precisely in the state of Virginia. In that year their sales jumped dramatically and
online sales accounted for 40% of total sales. Now the Apple Store has become a major retailer
of Apple products apart from the website, of course.

Marketing and Advertising

Distinctive marketing campaigns have been a strategy of Apple to attract customers and to
spread the information among them. Television commercials, Print Advertisements, Posters
in Public areas and wrap advertisement campaigns have been successful ways of outshining
the new product. Apple continues to command a market premium for producing a “better
mousetrap” throughout its history. Apple hired TBWA Chiat/day, an advertising agency that
designed the campaign of “Think Different” featuring “Albert Einstein”.

Customer Service

Apple believes that customer loyalty is the main thing, they are aware that customers are king
and they are the ones who always glorify and even worship Apple products sky high. This is also
what the current CEO of Apple, Tim Cook, realizes, he always takes the time to answer
complaints directly from customers who enter his email. Imagine how you feel when you
complain about something but the one who serves you is the owner of the company directly, it
must be extraordinary isn't it. In addition, Apple also provides international guarantees for their
products, this means that if you buy an Apple product in England and then when you go to
America the product has a problem, you can claim your warranty in America, of course, if there
is an Apple Store in that city.
Bibliography

Apple Inc. (2008). Various Press Releases and News Articles. Retrieved October 10, 2008,
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Esch, SV (2004). Apple's Success and Jobs' Succession. Macscope. Retrieved October 10,
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Bruner, R. (2000). TI, Apple Get Pats on Back. Bnet Business Network. Retrieved October 10,
2008, from http://findarticles.com/p/articles/mi_m0EKF/is_29_46/ai_63642891

Gardener, B. (2008). Learning From Failure: Apple's Most Notorious Flops.

http://www.wired.com/gadgets/mac/multimedia/2008/01/gallery_apple_flops

Trade Vibes (2008) Apple Inc Overview. Retrieved October 10, 2008, from
http://www.tradevibes.com/company/profile/apple-inc