The paper "Apple Inc Supply Chain and Competitive Advantages" is a good example of a business case study. Apple Inc. has created a sustained competitive advantage owing to its capability to create highly differentiated products. The company is a good example of how to wins customers by differentiating products (Nielson, 2014). Although it prides on making easy-to-use and iconic products, Apple does not sell products that only select customers or attempt to make the lowest-priced products. The first MP3 player on the market was not the iPod as is popularly perceived.
Nevertheless, customers choose Apple’ s products because the company has invested in maintaining a high quality of the product (Gustin, 2012). It has been able to expand its supply chain while maintaining product quality and taking greater control over delivery time and quality management. Apple adopted a formalized list of expectations and created exclusivity agreements in exchange for volume guarantees from their suppliers. 1.1 Supply chain management as a source of competitive advantage In the volatile global market, a major source of competitive advantage to a firm is its supply chain management. The aggressive competition global market today emanates from the availability of huge capital, information and technology, business creativity and globalization.
Pearson (2015) argues that having a high market share in the global competitive market is not adequate to earn maximum profit, thus, forcing organizations to focus on their competitive capabilities. By developing relationships with suppliers, over time, the company rapidly scaled operations to customer demand for new and existing and products (Barney, 1991). With some product and processes patented by the company, it has been working with its supply chain partners in developing the new manufacturing processes (Hau, 2004).
Moreover, placing high volume pre-orders with suppliers shows that firm has good financing to ensure adequate production capacity. This strategy has prevented competitors from copying their manufacturing resources. However, outsourcing has benefited Apple but on the other hand left it vulnerable to disruptions in supply chain key links (Teece, 1997). The supply chain has been severely affected by changes in international trade agreements to natural disasters. Apple cannot ignore the criticism leveled against factories and warehouses of its suppliers over working conditions. The satisfaction of end-users or customers becomes the organization’ s ultimate goal.
Satisfying customers require inter-organizational linkage because they dominate the market (Barney, 1991). With available mass customization and lower price, customers want a high quality of service. Customer needs should be matched with the type of supply chain as shown in the figure below. (Source: Pearson, 2015, p. 22) Figure 1: Alignment model on the supply chain by Fisher This is possible when the chain of distributors and retailers wholesalers, suppliers are committed in the marketing system. Specifically, globalization and technology information system have prevailed on firms to compete for not just a country or region level but also at the global level (Pearson, 2015).
Supply chain system does not tolerate blind interest of profit-making among supplier. Kotler argues that despite their robustness, firms lack requisites for success and total resources as they globalize (Fornalczyk, 2010). Firms have recognized the necessity to partner with other organizations in a bid to have a complete supply chain that provides value. The most influential and intense changes are Information and communication technology (ICT) because they directly affect companies. Giant highly bureaucratic firms at the onset of modern computers and communications began to erode as their manual systems could not keep pace with new customer demands (Barney, 1991).
According to Blanchard (2010), an effective supply chain system, in the global market, has enabled the integration and cooperation of firms in production to distribution channels. Given that fast modern communication and information system connects all the parties, they enjoy competitive advantages based on market roles and customer satisfaction.
Apple Inc., A. (2014). Apple Supplier Responsibility 2014 Progress Report. Apple Inc.
Bajarin, T. (2011). Apple’s Strategic Advantage. PCMag. http://www.pcmag.com/article2/0,2817,2380962,00.asp.
Banker, S. (2012) The Apple Supply Chain: The best in the world? Logisticsviewpoints. July 2, 2012. https://logisticsviewpoints.com/2012/07/02/the-apple-supply-chain-the-best-in-the-world/
Barney, J. B. (1991) Firm Resources and Sustained Competitive Advantage, Journal of Management, 17(1): 99–120.
Blanchard, D. (2010) Supply Chain Management Best Practices, 2nd. Edition, John Wiley & Sons.
Chen, I.J. & Paulraj, A. (2004). Towards a theory of supply chain management: the constructs and measurements. Journal of Opertations Management, 22(2):87- 102.
Chopra, S. & Meindle, P. (2004) Supply chain management. Strategy, planning, and operation. 2nd edition. Upper Saddle River, NJ: Prentice Hall.
Copeland, M. (2010). The iPad changes everything. Fortune, 161(4): 11-15.
Fawcett, S.E., Ellram, L.M., & Ogden, J.A. (2009) Supply chain management – from vision to implementation. Upper Saddle River, NJ: Pearson.
Fornalczyk, A. (2010) Competition Protection and Philip Kotler’s Strategic Recommendations (2010). Yearbook of Antitrust and Regulatory Studies, Vol. 3, No. 3, 2010. Available at SSRN: http://ssrn.com/abstract=2127814.
Gebremichael, B.A. & Rao, M.S. (2014) Supply chain management for sustainable competitive advantage (SCA). Journal of Business Management & Social Sciences Research, 3(2): 88-94.
Gustin, S. (2012) Why Apple is winning: Innovation, Opportunity and execution. Time. April 25, 2012. http://business.time.com/2012/04/25/why-apple-wins-innovation-opportunity-and-execution/
Hau, L. L. (2004) The Triple A Supply Chain. Harvard Business Review, Oct. 2004, 1– 12.
Johnson, K., Li, Y., Phan, H., Singer, J. & Trihn, H. (2012) The innovative success that is Apple, Inc. Marshall Digital Scholar: Marshall University.
Nielson, S. (2014) Why Apple’s supply chain ranked 1st in the world for a third time. MarketRealist. http://marketrealist.com/2014/02/apple-supply-chain/
Pearson, W. (2015) Supply chain and operations strategy. John Wiley and Sons.
Teece, D. J. & Pisano, G. and Shuen, A. (1997) Dynamic Capabilities and Strategic Management. Strategic Management Journal, 18(7): 509–33.