Apple Winners and Qualifiers
APPLE TEACHING NOTE
The Apple case can be used to illustrate the issues of make or buy and managing the supply chain. It is best used in the middle part of an operations strategy course. It not only introduces the issues of managing suppliers but also affords the opportunity to reinforce other key topics, including developing an operations strategy, designing products, and managing lead times and inventory. Questions similar to the ones below have been found adequate to bring out the key issues in the case study. 1. How does Apple compete in its major markets: Macs, iPods and iTunes? 2. How has operations designed its supply chain to support these markets? 3. What must Apple do to maintain its competitive position in the future?
1 How does Apple compete in its major markets: Macs, iPods and iTunes?
It is best here to consider each of Apple’s major markets separately before then looking at the overall picture. Within each market, it has also been found best to discuss the nature of the products before discussing how it competes in this market. 1) MAC PRODUCTS
The Mac product range currently consists of: • • • a) Desktops – iMac, Mini and Mac Pro Portables – MacBook, MacBook Pro and MacBook Air Servers – Xserve Product nature
The first question to ask is, what is the nature of the products that Apple designs, manufactures and sells? Its products involve the following key characteristics: • High-specification standard products – there is very little choice and models are continually discontinued to ensure the range does not proliferate (see Exhibit 6). It is important at some time to bring to the attention of participants that although the products are of a high specification, they tend to cost about the same as an equivalent specification from HP or Dell (see TN/1) Short product life cycles – products tend to be discontinued after 12 to 18 months and replaced with one of a higher specification sold for about the same price as the old one Relatively high
The Apple case can be used to illustrate the issues of make or buy and managing the supply chain. It is best used in the middle part of an operations strategy course. It not only introduces the issues of managing suppliers but also affords the opportunity to reinforce other key topics, including developing an operations strategy, designing products, and managing lead times and inventory. Questions similar to the ones below have been found adequate to bring out the key issues in the case study. 1. How does Apple compete in its major markets: Macs, iPods and iTunes? 2. How has operations designed its supply chain to support these markets? 3. What must Apple do to maintain its competitive position in the future?
1 How does Apple compete in its major markets: Macs, iPods and iTunes?
It is best here to consider each of Apple’s major markets separately before then looking at the overall picture. Within each market, it has also been found best to discuss the nature of the products before discussing how it competes in this market. 1) MAC PRODUCTS
The Mac product range currently consists of: • • • a) Desktops – iMac, Mini and Mac Pro Portables – MacBook, MacBook Pro and MacBook Air Servers – Xserve Product nature
The first question to ask is, what is the nature of the products that Apple designs, manufactures and sells? Its products involve the following key characteristics: • High-specification standard products – there is very little choice and models are continually discontinued to ensure the range does not proliferate (see Exhibit 6). It is important at some time to bring to the attention of participants that although the products are of a high specification, they tend to cost about the same as an equivalent specification from HP or Dell (see TN/1) Short product life cycles – products tend to be discontinued after 12 to 18 months and replaced with one of a higher specification sold for about the same price as the old one Relatively high