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Operations strategy @ apple group 6
- 1. OPERATION STRATEGY@APPLE INC. Presented by : Group-6 Deepak Solanki , Maheep, Pankaj, Harsha, Pradhuman, Priyank, Junaid
- 2. Birth of a Tech Giant – Apple Inc. 1/17/2020 Operational Strategy – Apple 2 1976 Steve Jobs & Steve Wozniak
- 3. Product Evolution@ Apple Inc. 1/17/2020 Operational Strategy – Apple 3 iMac iPod MacBook iPhone iPad Apple Watch 2001 2006 2007 2010 2015 1998
- 4. Global Presence of Apple 1/17/2020 Operational Strategy – Apple 4 Battery from China LCD, Camera, Compass from Japan Accelerometer from Germany Gyroscope from Switzerland Design, Glass screen, Wifi Chip, Audio Chips from USA. Supplier Locations Assembly Locations Warehousing Locations Retail Store Locations
- 5. 1/17/2020 Operational Strategy – Apple 5 Journey is not that smooth!!!
- 6. Stagnant Sales of Apple Products 1/17/2020 Operational Strategy – Apple 6 iPhone unit sales , in thousands
- 7. Apple Share Value 1/17/2020 Operational Strategy – Apple 7
- 8. 7/12/2019 Operational Strategy – Apple 8 • Technology challenge • Competition challenge • Economy challenge • Losing market share in Premium segment • Trade War • Leadership challenge Challenges Ahead for Apple
- 9. Apple’s Dilemma 7/12/2019 Operational Strategy – Apple 9 Latency • People waited impatiently for the company to release a new MacBook Pro Old OS • That new MacBook Pro, which arrived in October 2016, stabilized things for Apple, and it saw a meager .8% decline over the same period in 2015. But Apple had already lost to Windows-based PCs earlier in the year. Dependability Flexibility
- 10. Loosing Competitive Advantage (PC Market) 7/12/2019 Operational Strategy – Apple 10 Channel Direct shipping / Reselling to customer Through apple stores Logistics Strategic partnerships to enable high service levels Negotiations, discounts for high volumes Inventory Almost Nil • An extension of just-in-time manufacturing Huge inventories, esp. to support demand during product launches Tracking Each consignment can be tracked separately through the courier service Electronic tags attached to some devices in the lot for tracking purpose, to avoid leakages ASPECT OTHERS APPLE
- 11. Loosing Competitive Advantage (PC Market) 7/12/2019 Operational Strategy – Apple 11 Process Just-in-time manufacturing ∙ Assembly plants ∙ Components purchased from suppliers Outsourced manufacturing operations ∙ Scale economy & Only major components are purchased Supply Partnership with key suppliers ∙ No attempt of backward integration ∙ Rather creating a virtual integration with suppliers as well as customers ∙ Piggy-riding the brand of component suppliers ∙ Few vendors but long-term relationship, enables just-in-time Suppliers at arm’s length ∙ Best quotes taken and justification required ∙ High negotiating power because of high volume, deep discounts ∙ High control on each supplier ASPECT OTHERS APPLE
- 12. 7/12/2019 Operational Strategy – Apple 12 Samsung and Apple’s Love - Hate Supply Chain Relationship https://heizerrenderom.wordpress.com/2017/10/05/om-in-the-news-samsung-and-apples-love-hate-supply-chain-relationship/
- 13. 1/17/2020 Operational Strategy – Apple 13 SAMSUNG COMPETITIVE ADVANTAGE Proficient in semi-conductor circuits Expertise of AMOLED display Samsung makes $110 from each $1,000 iPhone X that Apple sells Prowess in memory chips Vertical integration and a flood of products
- 14. 1/17/2020 Operational Strategy – Apple 14 Analysis
- 15. 1/17/2020 Operational Strategy – Apple 15 Business Strategy Functional Strategies Marketing Strategy Operations Strategy Finance Strategy Technology Strategy Operational Technology Operational Finance Operational Operations Operational Marketing Business Model Sets the overall purpose and objective for Operating Model Defines how the Business model will be achieved Relationship between “Business Model” & “Operating Model”
- 16. Strategic Reconciliation – Operations 1/17/2020 Operational Strategy – Apple 16 Tangible& Intangible Resources Operations capabilities Operations processes Operations strategy decision areas Customer Needs Performance objectives Market Positioning Competito rs actions
- 17. Operation Strategy Matrix- Apple 1/17/2020 Operational Strategy – Apple 17 Quality 1. Unique competetive technology developed by Apple R&D Speed 1. "Make to Stock" System 1. Less No.of Varieties in products Dependability 1.Stringent Norms to select suppliers which resulted to only two assembling companies Flexibility 1. Relationship based contract with suppliers Cost 1. Developed multiple suppliers to compete on material cost 1. Standardization of processes Capacity Supply Network Process Technology Development & Organisation MarketCompetitiveness Decision Areas Resource Usage PerformanceObjectives
- 18. Decision Area of Operations Strategy Capacity Strategy Purchase & Supply Strategy Process Technology Strategy Improvement Strategy Product & Service Development Strategy 1/17/2020
- 19. 1/17/2020 Operational Strategy – Apple 19 Purchase and Supply Strategy “Apple is known for its strategy of getting suppliers to compete with each- other and reduce the numbers of suppliers considerably” -CEO, Tim Cook (2015)
- 20. Apple Value Chain 1/17/2020 Operational Strategy – Apple 20
- 21. Sourcing Strategy @ Apple 1/17/2020 Operational Strategy – Apple 21 •Apple does not practice Just-in-Time principle in inbound logistics •No JIT •Material purchase which typically cover its requirements for periods up to 150 days. •Order to Stock •Chosen players across the globe for individual components of products High Bargaining power
- 22. Operational Strategy @ Apple 1/17/2020 Operational Strategy – Apple 22 First Tier Suppliers Supplier- 1 Supplier- 2 Assembling Units Second Tier Suppliers Supplier- 1 Supplier- 2 Supplier- 3 Supplier- 4 Raw material supplier First Tier Customer Customer- 1 Customer- 2 Whole Sale & Retail Second Tier Customer Customer- 1 Customer- 2 End Customer Flow of Products/Services Flow of information
- 23. Apple : Retail Strategy 1/17/2020 Operational Strategy – Apple 23
- 24. Retail Store Presence 1/17/2020 Operational Strategy – Apple 24
- 25. Apple Store: Key to Retail Strategy 1/17/2020 Operational Strategy – Apple 25
- 26. Apple Store: Key to Retail Strategy • It is increasingly hard to differentiate between smartphone brands or to add value to new products. • Physical stores are important entry points for new customer and create tight relationship with its consumer via its store experience & service. • Apple Stores operate as seamless extensions of the brand experience, adding the human elements of service and hands-on experience. 1/17/2020 Operational Strategy – Apple 26
- 27. Apple Eco-System Apple Store Products iPhone iMac Apple Watch iPod iPad Apple T.V Digital Media Apps Movies Songs Books 1/17/2020 Operational Strategy – Apple 27
- 28. Apple Eco-System • Ability to lock people into products which purposefully only communicate well with other Apple products • This strategy of adding value to the retail experience help support consumer loyalty, reinforce brand position. 1/17/2020 Operational Strategy – Apple 28
- 29. 1/17/2020 Operational Strategy – Apple 29 Process Technology Strategy “Design is not just what it looks like and feels like. Design is how it works is . -Steve Jobs (2007)
- 30. BASIC PROCESS STRATEGY 7/12/2019 Operational Strategy – Apple 30 REPETITIVE FOCUS MASS CUSTOMISATION PROCESS FOCUS PRODUCT FOCUS https://www.youtube.com/watch?v=ZxMDt77Bzoo
- 31. 1/17/2020 Operational Strategy – Apple 31 THE PRODUCT – PROCESS MATRIX
- 32. 1/17/2020 Operational Strategy – Apple 32 Improvement Strategy “The cure for Apple is not cost cutting , the cure for Apple is to innovate its way out of its current predicaments. -Steve Jobs (2008)
- 33. 1/17/2020 Operational Strategy – Apple 33 Form the Basis of Improvements and New Development Programs Around Customer Insights Place an Emphasis on Project Selection Disruptive Customer Experiences Make Your Innovation Strategy and Business Strategy Symbiotic Engineer a Culture that Supports Innovation Get Leadership Highly Involved in R&D Decision Making https://innov8rs.co/news/the-six-values-of-high-performance-innovators/ Improvement Strategy
- 34. 1/17/2020 Operational Strategy – Apple 34 Product and Service Development Strategy
- 35. Strategic Importance of Product and service Development 1/17/2020 Operational Strategy – Apple 35 Increased Competitiveness Shortened life cycle Market Requirements Fragmented Market Rapid Technology Change Means of building capabilities Operation Resources Product And Service Development Involves all parts of the business
- 36. Henderson Clark Model For Apple 1/17/2020 Operational Strategy – Apple 361/17/2020 Low Impact on Component knowledge High Impact on Component knowledge High Impact on Architectural knowledge Low Impact on Architectural knowledge Radical InnovationArchitectural Innovation Modular InnovationIncremental Innovation
- 37. Strategical Impact at Apple 1/17/2020 Operational Strategy – Apple 37
- 38. Recommendations 1/17/2020 Operational Strategy – Apple 38 Reliability Take India more seriously Services Sustained Margins Agile Approach Opening New Factory Risks Stratified