Barraging Power Accg 301

Table of Contents

Introduction 2 Identify and describe the customers 2 Bargaining power of customers: 2 Discuss and Evaluate on The customer relation management 3 How they create value for customer 4 Recommendations 4 Customer profitability analysis 5 Conclusion 5 Reference 6

Introduction Apple Inc. is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's famous hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. The purpose of this report is to discuss the effects of customer’s behavior with Apple Inc. products under the theoretical concepts. First, identify the ability of customer that influences the Apple Inc. Then discuss and evaluate the customer relation management and how the Apple Inc. create value for customer, with the recommendations. Finally, comment on the relevance information of the theory. Identify and describe the customers Generally, Apple Icn.’s target customer is who with high-income, high consumption, due to the high price of their products. And now people pay more attention on the appearance of design, the use of touch, easy operation. The CEO of Apple Inc. research and develop some famous products in different electronic areas for different customer groups. For the office people in computer area, who need a profession equipment to help their work can chose Apple Inc. products like MacBook, MacBook air and iMac. For people who like listening music, they can chose iPod shufflt, nano, classic and touch those types. (Apple Store 2011)
Bargaining power of customers:
Bargaining power of customers is one of Porters’ five forces that are the ability to influence the setting of prices. The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure, which also affects the customer's sensitivity to price changes（Mallon,2006).
In general, Apple Ltd. has provided a high standard of customer service. 2010 was a boom year for Apple. However, the Apple rumors are already blossoming--can Steve Jobs Company pull off yet more technology coups in 2011? (Apple Store, 2011).
First of all, according to Porter's five forces industry analysis framework, the strength of buyer power is to create a one of the industry's competitive structure. Since Apple is seen as an innovator, demand for its products is quite high. Personal computer buyers are price-sensitive. However, buyers have less power when the switching costs and brand-loyalties are high.
Thus, PC manufacturers can reduce a threat of buyer power by differentiating their products. For example: Apple’s unique operation system and its computers specifically targeted to publishing and designing industry prevent their buyers from switching to competitors’ products. Its sleek product design represented by iMac and iBook also acquired many fans and increased brand-loyalty.
Secondly, that is the availability of substitutes. How easy can a product or service be substituted? For instance, can users of computers substitute other type of computers for IBM brand? This threat is in addition to the one from rival firms. Threat of substitutes depends on three parts which are a substitute better, buyers' willingness to substitute, and the last is relative price and performance of substitutes. Buyers find that Apple does have substitutes for its products, but the uniqueness of its products and their brand make Apple a very profitable company. For example, iPhone mainly distinguishes itself from competitors over its user interface that is driven by a multi-touch screen. Apple claims various patents relating to this technology. However, it is still likely that other players in the market will soon be able to deliver similar products. Discuss and Evaluate on The customer relation management Today, quality management is a major concern for all organisations. Usually, successful customer relationships are created by organisation that linking to employee quality management and improvement techniques to the output of their product or service. (Web) The organization is aim to meeting and exceeding the customer satisfaction. For matching a good management, company should follow: Perceived quality It is significant not only on satisfy customer requirements, it is also vital that customers feel that they are satisfied. In Apple store, lots of customers are testing the new products. It is a marketing strategy of Apple Company. Apple Inc. provide the sample of product and allowance the customer to tasting, feeling their product, try to match the customer satisfaction. Quality assurance Quality control’s target on identifying errors, finding out the cause and then trying to correct them. It involves the prevention of quality problems through planned and systematic management Apple Inc. has a plan to ensure their products with good quality. The suppliers of Apple’s should register their information and capabilities within the information database (SID). Apple Inc. set down a code of conduct that it requires the suppliers to ensure safe working conditions, to treat their employees with respect and dignity, and to establish and maintain environmentally responsible manufacturing processes. Continuous improvement It is important for an organization to develop and create new products that meet the customer’s needs. Apple has a strong focus on research and development (R&D). As continual investment in R&D, it is critical for the development and enhancement of innovative products and technologies. In addition to evolving its PCs and related solutions, in the resent year, the company continues to capitalize on the convergence of the PC, digital consumer electronics and mobile communication by creating and refining innovations, such as the “touch wheel” iPod, full-screen touch iPhone, iTunes store, Apple TV and iPad. Using feedback The necessary bound to the process of continuous improvement and customer-focused thinking is the need to listen to customers and use the feedback to improve or create products and services. The Improvement of the Apple’s product is based on the costumers’ feedback and comment. They focus on the feedback to learned what real the people want and try to matching the idea of customers. How they create value for customer Companies increasingly view time as driver of strategy. Conducting business correctly and quickly helps increase revenues and decrease cost. “Saving time for customer” becomes a goal that companies must to reach. Then they need to measure operation time to manage it properly. Two parts of operation time are customer-response time and on-time performance. Refer to the book customer-response is measured from the date/time of a customer’s order for a product or service to the date/time of its delivery to the customer. Customer places order for product
Order
received by manufacturing
Machine
set-up begins for order
Order manufactured:
Product becomes finished good
Order
delivered to customer Receipt
Time
Waiting
Time
Manufacturing time Manufacturing
Cycle time
Delivery time
Customer-response time
Customer places order for product
Order
received by manufacturing
Machine
set-up begins for order
Order manufactured:
Product becomes finished good
Order
delivered to customer Receipt
Time
Waiting
Time
Manufacturing time Manufacturing
Cycle time
Delivery time
Customer-response time

The graph explains the components of customer-response time. When customer buys a product in Apple Store, the staffs will patiently explaining the product and if u decides to buy, no more waiting, they will get the product for customer in time. On- time performance is delivery of a product or service by the time it is scheduled to be delivered.(Book)It will get more satisfaction if deliver on time. Going to online Apple Store, select a product then click “buy” and type the address to deliver. With fee days waiting, the selected product is received. If notice the process, when the product is selected, it is enter the purchase-line, and ready to deliver. On the first day to deliver, customer will receive a message that writes the product is send. And receive the package is on time. On the cost, Apple Inc. makes the free delivery and sometimes makes a discount on its products for customers. Recommendations To recommend on the evaluation of increasing value created for their customers. Some keywords of managing bottlenecks theory is shown on the --Book---. Apple Inc. needs some improve to be perfect. First is price, Apple creates more prices on its brand. High price are often prohibitive, so Apple need to consider about the low-income level customer, and reduce the price of product (but above the cost) equal to the quality value. Next is the compatibility, the Apple’s system need to compatible more software for using conveniently. Lastly, to increase the sell, more retail store is needed.
Customer profitability analysis
A customer profitability analysis is an evaluation process that focuses on assigning costs and revenues to segments of the customer base, instead of assigning revenues and costs to the actual products, or the units or departments that compose the corporate structure of the produce. Customers are as the last part of value chain; an analysis of customer differences in revenues and costs can provide insight into why differences exist in the operating profit earned from different customers (book). Why calculate customer profitability? In actual practice, a customer profitability analysis looks at each segment of the process of creating and selling products to customers. For example, Apply is facing the various kinds of customers group, however, which have income or have a high-income are the main groups. That means some more valuable than others, with the level of investment delivered commensurate to the level of customer value. The profitability of the customer mix is becoming more important than profits of the individual products.
Further more, the types of customers should be focused on to maximize profitability. While many organizations see the potential value of calculating and reporting customer profitability, not all areas are equally problematic to the organization. Without understanding how different customers consume costs and resources, organizations cannot successfully calculate customer profitability.
Finally, businesses those are serious about providing an exceptional customer experience and maintaining their business profitability link all these costs to individual customers so that the sum of the profit from each customer equals the net company profits. For instance, in order to stimulate and promote consumer purchase a qualifying Apple computer, using Apple’s education pricing and a qualifying iPod during the specified four months and get the rebate of up to $289. Customers just can be sent the information to Apple within the specified time while get a free iPod. Conclusion In the discussion and evaluation which are on the products of Apple. The company follows the key concepts of “customer relation management”, and aim to create value for customer. Some recommendations may help Apple Inc. to make business decision for improvement. Then, Apple created the uniqueness of its products for against the competitive electronic firms industry. Based on the above information indicates that it can be concluded that Apple Inc. has been creating value for customers. Finally, the customer profitability analysis takes a competitive advantage of Apple. Apple is the consumer electronics company that to achieve a good customer analysis to increase the consumers’ and companies’ value.

Reference

Allen M, 2001, Customer Relation Management, Select Knowledge Limited, London

Apple Store 2011, Apple stores Australia, viewed 1 May 2011, < http://store.apple.com/au>.

Ezine Articles 2011, Porter's Five Forces Analysis, viewed 1 May 2011, <http://ezinearticles.com/?Porters-Five-Forces-Analysis&id=15116>.

Wynder M, 2011, Organisational Planning And Control, Pearson, Australia.