Introduction
Apple Inc. Company is one of the most thriving enterprises manufacturing technological products. The organization designs, manufactures, and sells software and hardware products around the world. Some of the products developed by Apple include iPhone, iPad, Apple smartwatch, computers, and other hardware products. Also, the company provides online services and applications used by individuals in day-to-day activities. Of course, in line with the increased demand for digital goods, Apple has several online applications where people buy its products including the iTunes and iBook. Furthermore, the company uses business strategies that promote its brand and focus on consumers and revenue (Christopher, 2016). Even though other factors contribute to the overall success of Apple Inc., the most significant reason for its success is the proper management of the company’s supply chain.
Apple’s Business Model and Supply Chain Strategy
Economists argue that Apple has the best supply chain globally and is the leader in supply chain management. Although many details regarding the company’s supply chain are secretive, the available information suggests that Apple uses a simple strategy to succeed (Marshall et al., 2016). Consequently, the organization outsources materials for production from different countries, mainly Asia, China, and the USA. Since many suppliers increase the price of resources as demand increases, Apple invites different suppliers to present their materials and costs. As a result, competition is increased, which forces suppliers to lower their price, hence acquiring materials at a lower price. Also, the competition gives the management an opportunity to sample supplies and purchase high-quality materials. Similarly, the assembly of its products takes place in China leading to reduced production cost. After production, the company supplies its products directly to retailers and final consumers using shipment companies such as UPS and FedEx. Thus, the chain remains short, and consumers receive their orders within a short time. In addition, Apple supplies its products around the world in stores where any individual can access and purchase.
Competitor’s Strategies
Although Apple has a grand supply chain strategy, there are competitors in the industry. Nevertheless, Apple’s strategy offers it a competitive advantage over the competitors. Outsourcing materials from various countries assist in the mitigation of late delivery and disruptions in the supply chain. Apple’s biggest competitor is Samsung. Previously, Samsung assembled Apple’s components for new products. As a result, the supply chain of Samsung grew in efficiency. Due to the skilled employees, assembling processes, and equipped assembly plants attained during their partnership with Apple, Samsung developed an efficient supply chain strategy. However, while Apple outsources most of its services and components from other suppliers, Samsung assembles its products in their in-house plants. The supply strategy used by Samsung to source for materials is also different from that of Apple because they use a single supplier while Apple sources one element from multiple suppliers (Marshall et al., 2016). While there are differences in the supply chain management strategies of the two companies, there are also some similarities. Taking into account that Samsung uses a distribution channel that moves its products to retailers, which is similar to Apple’s distribution model.