Note that although the Apple II and the Macintosh received initial success, they were subsequently pitted against personal computer products from IBM. Because each product complements one another, consumers would usually choose to stick with Apple rather than buying different products from different manufacturers and create a hodgepodge of diverse product and user experience. Designing and engineering the hardware, having outsourced manufacturers follow instructions on the dot, developing the base operating system, and regulating third-party app developers mean that Apple has substantial control over a closed ecosystem. Why Apple will never bring manufacturing jobs back to the U.S. CNN. In 2008, Apple released the following graphic illustrating just how pervasive they believed video-based devices would be, which clearly makes the value of digital content providers critical to their future business model. Apple focuses its American operations on tasks for which the United States has a competitive advantage, and does the same with its production. Strategic Outsourcing of Apple Computers Inc . Positioning Apple products as premium brands is possible through a product strategy that takes into consideration the addition of fashionable and innovative features, a pricing strategy following a premium pricing approach, and a distribution strategy that involves retail experience and reliable after-sales support. Digitimes took a different angle when explaining Apple’s new outsourcing strategy. Strategic outsourcing is the process of engaging the services of a provider to manage essential tasks that would otherwise be managed by in-house personnel. Esploro embraces the responsibility of doing business that benefits the customers and serves the greater interests of the community. The Outsourcing Matrix is a valuable tool to companies that have decisions to make regarding where processes should be sent to be completed. July 31, 2014. How much of the iPhone is made in China? Lost your password? Apple’s sourcing process is designed to ensure equal and fair treatment of suppliers allowing participation in a competitive procurement process. Another way Apple maintains a premium branding positioning is through a premium pricing strategy. The fact that manufacturing capabilities are outsourced should not be taken against Apple. Apple’s outsourcing strategy it’s evident when you read the back of your iPhone — Desing by Apple in California. Former Apple CEO Steve Jobs believed that jobs could be created in the United States even though his company’s major manufacturing base was overseas. Under the leadership of Steve Jobs, the company expanded its product portfolio with the introduction of the portable digital music player iPod and the digital content management and music store iTunes in 2001. Retrieved November 20, 2015 from http://www.forbes.com/sites/forbesleadershipforum/2012/01/25/the-real-reason-the-u-s-doesnt-make-iphones-we-wouldnt-want-to/ Additional Apple Card Monthly Installments and iPhone Payments terms apply. Top Books Top Audiobooks Oprah’s Book Club Die Outsourcing-Falle Wie die Globalisierung in den Ruin führen kann. They must be competitive, flexible, fast and meet quality. Every sound business strategy also includes a game plan for reaching people and turning them into customers. Retrieved November 20, 2015 from http://www.forbes.com/sites/kenrapoza/2012/01/31/how-much-of-the-iPhone-is-made-in-china/, "The Apple Outsourcing Strategy Evaluation" (2015, November 19) Retrieved December 10, 2020, from https://www.paperdue.com/essay/the-apple-outsourcing-strategy-evaluation-2160552, "The Apple Outsourcing Strategy Evaluation" 19 November 2015. Consistent premium branding reinforces another aspect of the marketing strategy of Apple called cult marketing. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Apple. To manage Apple Card Monthly Installments, you need an iPhone with iOS 13.2 or later or an iPad with iPadOS 13.2 or later. Business Outsourcing Benefits. Note that these products were loosely based on counterpart products from competitors but featured significant reinventions and new innovative improvements. Electronic Inspiration LLC. To be specific, the company designs and engineers the hardware for these devices, specifically the system-on-chip or SoC hardware that houses different processing unit and connectivity components, among others, and have them fabricated and produced by outsourced manufacturers. Apple mission statement is “ to bringing the best user experience to its customers through its innovative hardware, software, and services. This is central in cult marketing nonetheless. His firm faith in this synergy came from an understanding that the United States would only benefit from a strategic outsourcing strategy. At paperdue.com, we provide students the tools they need to streamline their studying, researching, and writing tasks. Apple also alternates between a lean supply chain strategy and an agile supply chain strategy depending on current market requirements and industry trajectories. You agree to our terms and privacy policy by consuming our contents. For example, the user interfaces of Mac computers, the iPad, and the iPhone have similar functional and design principles, thus creating a sense of familiarity. The poor performance of Apple stemmed from an inferior product strategy. Essentially, outsourcing is "the act of one company contracting with another company to provide services that might otherwise be performed by in-house employees" (Conjecture Corporation, 2012). This article provides a concise analysis and discussion of several critical strategies employed by the Cupertino-based company. It helped them leverage the expertise of their vendors and focus on the identified core-competency. Rapoza, K (2012). Note that the marketing strategy of Apple has incessantly evolved through the years due to changing market requirements. outsourcing business in Asia, and, secondly, we look into Apple Inc.'s supply chain to examine Apple supplier factory operations in Mainland China from, primarily, an environmental protection point of view. $30.99; $30.99; Publisher Description. Introduction As part of strategic management, the outsourcing is becoming more and more popular in the field of business, being a way to reduce costs and to create competitive advantage and increase organizations performance. Apple’s dual-sourcing strategy Apple (AAPL) sources its components from at least two suppliers in order to reduce risk and have negotiation strength. Click here to download : Excellent Powerpoint Slides on HR Strategy and HR KPIs . Manufacturing and Supply Chain Strategy Outsourcing was first recognized as a business strategy in 1989 and became an integral part of business economics throughout the 1990s. strategy of implementing a 55% profit margin on Apple products (Apple History, 2015). This shows that many people in China are being payed very China, particularly after 1978, received a wave of foreign direct investment and the country has been on a continuous upgrading path in economic power and social structure. Furthermore, a particular user of different Apple devices can take advantage of complementation through the Apple ID. Note that the company also spends on traditional marketing and advertising, other promotional activities such as sales promotion, as well as digital marketing activities. With an annual growth rate of 6.5% until 2017, average annual IT Outsourcing investment has reached almost 25% of total IT spend. The introduction of the desktop computer Apple II in 1977 essentially marked the beginning of personal computing for mass consumption, as well as the foray of the company into consumer electronics. Email address * Password * Log in. Topics: Outsourcing, Globalization, IPod Pages: 2 (465 words) Published: February 14, 2012. In its current form, Apple has found a way to balance vertical integration with an outsourcing model. These strategies essentially provide the defining characteristics and profile of Apple. Apple Outbound Logistics. In general, companies have been outsourcing more and more over the last decade, and it’s pretty reasonable to do so from a business perspective because of the benefits of outsourcing IT. http://www.smh.com.au/technology/technology-news/apple-and-the-folly-of-outsourced-manufacturing-20120424-1xj2x.html, http://www.forbes.com/sites/forbesleadershipforum/2012/01/25/the-real-reason-the-u-s-doesnt-make-iphones-we-wouldnt-want-to/, http://money.cnn.com/2012/10/17/technology/apple-china-jobs/, http://www.forbes.com/sites/kenrapoza/2012/01/31/how-much-of-the-iPhone-is-made-in-china/, Outsourcing Has Made Great Controversy Within a, Apple iPhone Company in the Achievement of, Strategic Management Competing With Apple, Outsourcing Has Made Great Controversy Within A, Apple IPhone Company In The Achievement Of, Strategic Management Samsung Group And Apple Inc, The Apple Outsourcing Strategy Evaluation Essay. - outsourcing - inventory management. Apple was not the first to introduce the personal computer. As of July 2013, Apple has developed 417 retail stores in 13 countries and an online store available in 38 countries with global sales of $16billion dollars in merchandise in 2011 (Wikipedia, 2013).