Running Head: NEW ENABLERS FOR APPLE INC.

Assignment 1: Vice President ! O"eratins# Part 1

Ne$ Ena%&ers !r A""&e Inc.
Name
'r. P()&&is Parise
B*S +1+ , O"eratins -anagement
A"ri& ./# .011
Ne$ Ena%&ers !r A""&e Inc.
A%stract
2(e "ur"se ! t(is "a"er is t ana&)3e t(e current "eratins strateg) and c(a&&enges
!acing A""&e Inc.4s ce&& "(ne %usiness. 2(e ana&)sis $i&& inc&ude e5a&uating t(e 6e) e&ements !
t(eir "eratina& e!!iciencies and determining an) $ea6nesses in eac( tas6. A!ter t(rug(
ana&)sis ! t(e mar6et and t(e current strateg)# a ne$ "eratins strateg) "&an $i&& %e !rmu&ated
t cm%at c(anges in t(e mar6et %ased n t(e !ur cm"etiti5e "ririties ! cst# 7ua&it)# time
and !&e8i%i&it). 2(e !ur cm"etiti5e "ririties $i&& %e t(rug(&) ana&)3ed a&ng $it( t(e
"rductin "rcess in rder t esta%&is( t(ree ne$ ena%&ers t(at are a&igned $it( t(e &ng9term
"&an. Prs and cns ! t(ese ne$ ena%&ers $i&& %e e5a&uated t determine i! t(e) !it in t(e "&an.
A !ina& recmmendatin $i&& %e "r"sed. 2(is "&an $i&& t(en %e "resented t t(e C(ie!
E8ecuti5e O!!icer.
.
Ne$ Ena%&ers !r A""&e Inc.
A""&e4s "eratina& tas6s# e!!iciencies# and strateg)
A""&e Inc.4s "eratina& strateg) (as %een ne t(at ma6es use ! t(e !&&$ing 6e)
e&ements: !inding t(e ne$est tec(n&g)# 7uic6&) designing "rducts# getting t(em t mar6et
!ast# and &eading t(e "(ne# cm"uter# and media mar6et in "rduct design. Frmer CEO# Ste5e
;%s said# <A""&e is t(e &argest m%i&e de5ices cm"an) in t(e $r&d. Larger t(an t(e m%i&e
de5ices %usinesses ! Sn)# Samsung# and N6ia= >P$er# .011?. A""&e (as %een a%&e t
success!u&&) gr$ %ecause t(e) (a5e inn5ated $it( ne$ "rducts e5er) time t(e) (it t(e "ea6
! t(eir <S9cur5e= >P$er# .011?. -st cm"anies are nt a%&e t 6ee" a(ead ! t(is s9ca&&ed S9
cur5e %ecause it usua&&) "ea6s 7uic6er t(an t(e) e8"ect and t(e) are nt "re"ared !r t(e
d$nturn. A""&e (as made it a strateg) t %e "re"ared and read) t g $it( a ne$ "rduct as
sn as t(e "rir "rduct %egins t s($ diminis(ing returns. 2(us# A""&e4s "eratina&
strateg)# cm"sed "rimari&) ! t(e !&&$ing t$ cm"etiti5e "ririties: 7ua&it) and time# (as
gi5en A""&e a cm"etiti5e ad5antage 5er t(er ce&& "(ne manu!acturers. A""&e (as !cused n
ris6 ta6ing tas6s and t(in6ing utside ! t(e %8 t su""rt t(is strateg) !r creating inn5ati5e#
ne$ "rducts. 2(ere!re# A""&e (as a team ! engineers and de5e&"ers %us) $r6ing t cme
u" $it( t(e ne$est "rducts# design and s!t$are. 2(ese "ririties (a5e %een t(e rder $inners
&eading t t(e success ! A""&e.
In t(e "ast# t(ere (a5e nt %een man) ce&& "(ne cm"anies t(at cu&d cme c&se t
reac(ing A""&e4s &e5e&. Recent&) t(er ce&& "(ne manu!acturers suc( as Samsung (a5e caug(t
u" and are c(anging t(e mar6et"&ace and t(e rder 7ua&i!iers in t(e ce&& "(ne industr). 2(e ne$
rder 7ua&i!iers (e&"ing Samsung e8ce& are nt re&ated t inn5atin as muc( as t Samsung4s
uni7ue su""&) c(ain and cst sa5ings. 2(ere!re# t(e tas6s A""&e !cused n in t(e "ast t(at
@
Ne$ Ena%&ers !r A""&e Inc.
a&igned $it( t(eir "eratins strateg) are nt as e!!ecti5e n$. 2(e energ) A""&e (as "&aced n
inn5ati5e tas6s rat(er t(an su""&) c(ain tas6s are a&&$ing Samsung t m5e a(ead ! A""&e.
Wea6nesses $it( A""&e4s tas6s and current "eratina& strateg) are t(at t(e) (a5e <nt
re&eased an inn5ati5e "rduct since t(e iPad and in5estrs $ant a ne$ "rduct t %ring A""&eAs
stc6s %ac6 u"= >Internatina& Business# .011?. A""&e (as re&ied (ea5i&) n t(eir iP(ne and
iPad as t(eir main re5enue stream. A&s# t(e <&ac6 ! "rducts at di!!erent "rice "ints= and
<intense "rice cm"etitin in t(e emerging natins= is (e&"ing A""&e4s cm"etitrs gain mar6et
s(are. >A""&e Inc. SWO2 Ana&)sis# .011?. A""&e4s stc6(&ders are cncerned as t(e) are used
t A""&e stc6 ging u"# nt d$n. 2(is is an indicatin t(at A""&e4s inn5atin and time
"eratina& strategies ma) nt %e $r6ing as $e&& as t(e) used t. A""&e4s current CEO# 2im
C6 recent&) <re5ea&ed A""&e $i&& intrduce "rducts in ne$ categries#= %ut (e did nt
mentin $(at t(e) $u&d %e. >Internatina& Business# .011?. -st &i6e&) (e is in6&ing ! t(e
A""&e 2V t(at is current&) in de5e&"ment. In t(e "ast# A""&e4s strateg) (as %een t cme ut
$it( t(e ne$est and (ttest tec(n&g) inn5atins 5er) 7uic6&)# r as sn as t(eir current
re&eases %egan t (it mar6et saturatin. 2(e) $ere cntinua&&) un5ei&ing t(ese ama3ing ne$
"rducts. Fr t(se $( are tec(n&gica&&) c(a&&enged# it $as t sn. As sn as ne &earned
($ t use t(e current "rduct and $as cm!rta%&e $it( it# t(e) $u&d cme ut $it( a ne$#
%etter 5ersin. 2 sme custmers# t(is $as e8as"erating. Stc6(&ders $ere e&ated as stc6
"rices cntinued t sar and di5idends gre$ su%stantia&&).
Wit( t(e s&$d$n ! ne$ "rduct !!erings# A""&e is nt 6ee"ing u" $it( t(eir $n
re"utatin and "eratina& strateg)# a&t(ug( t(e) are indicating t t(e "u%&ic t(at t(e) can and
$i&&. 2(ere!re# t(eir actua& resu&ts d nt matc( t(eir "ercei5ed strateg). *nder t(e 5ei&# t(e)
are !urius&) tr)ing t s$itc( gears t a su""&) c(ain c(ange t(at !cuses n cst rat(er t(an time
1
Ne$ Ena%&ers !r A""&e Inc.
and 7ua&it) in rder t 6ee" u" $it( Samsung. <Samsung $ns %ig c(un6s ! t(eir su""&) c(ain=
$(ic( means t(e) cntr& ($ t(e "arts and screens are made t(at g int a&& t(eir ce&& "(nes
>E&mer9'eWitt# .01@?. It a&s means Samsung4s csts are &ess t(an A""&e# ma6ing t(eir "(nes
&ess e8"ensi5e. 2(is (as gi5en Samsung a cm"etiti5e ad5antage 5er A""&e. <A""&e desnAt
$n t(eir su""&) c(ain utrig(t 99 t(e) dnAt $ant t %e in t(e semicnductr r screen ma6ing
%usiness# t(e) dnAt $ant t (a5e a camera r %atter) !actr) n t(eir %a&ance s(eet= >E&mer9
'eWitt# .01@?. 2 cm"ete $it( Samsung# A""&e needs t c(ange t(eir "eratina& strateg)
!cus t %etter cntr& t(eir su""&) c(ain and cst issues.
Ne$ "eratin strateg) !r A""&e %ased n t(e cm"etiti5e "ririties ! cst and !&e8i%i&it)
A""&e (as %ecme t(e $r&d &eader in ce&& "(nes main&) %ecause ! its 6e) cm"etiti5e
"ririties ! ne$ness and inn5atin# r time and 7ua&it). 2(is (as 6e"t A""&e n t(e &eading
edge ! tec(n&g) $it(in t(e ce&& "(ne mar6et. 2(ere!re# t(e) (a5e sta)ed a(ead ! t(eir
cm"etitrs %) (a5ing t(e ne$est# mst inn5ati5e ce&& "(nes n t(e mar6et. Being n t(e
cutting edge ! tec(n&g) is nt c(ea". A""&e (ad t in5est &arge amunts ! ca"ita& in researc(
and de5e&"ment in rder t reac( t(e t" and t(e) (a5e %een at t(e (ig(er end ! t(e cst
categr). 2(is means custmers "a) t" d&&ar !r t(eir "rducts. But# mst custmers (a5en4t
seemed t mind %ecause t(e) $ant an iP(ne $it( its %ene!its# and t(e) !ee& it is $rt( t(e cst.
2(ere!re# cst (as nt %een ne ! A""&e4s cm"etiti5e "ririties. Being t(e !irst t cme ut
$it( t(e ne$est# %est tec(n&g) (as %een A""&e4s !cus and (as turned t(ese t$ rder $inners
int rder 7ua&i!iers $it(in t(e ce&& "(ne industr).
A""&e4s cm"etitrs are !ina&&) starting t catc( u" %) de5e&"ing t(eir $n creati5e
tec(n&gies t(at are c(a&&enging A""&e. Wit( Samsung n$ in t(e game and !!ering a 7ua&it)
ce&& "(ne $(ic( is &ess e8"ensi5e t(an A""&e# t(e) are c(anging t(e rder 7ua&i!iers and stea&ing
+
Ne$ Ena%&ers !r A""&e Inc.
A""&e custmers. In rder !r A""&e t sta) n t"# t(e) need t ada"t t(eir "eratins and !cus
mre n t(eir su""&) c(ain# !&e8i%i&it)# and cst. 2(e) (a5e a&read) started t d t(is %) entering
int "artners(i" agreements $it( man) ! t(eir su""&iers. A&t(ug( t(e) are nt "urc(asing t(eir
su""&iers &i6e Samsung# t(e) are !rging a(ead $it( %inding cntracts t(at a&&$ t(em t
essentia&&) cntr& t(e su""&ier# %ut nt $n t(e cm"anies. 2(is "rductin mde& $i&& a&&$
A""&e t %ecme <Bint design manu!acturers >;'-s?= $it( t(ese 5endrC"artners and t %etter
cntr& csts and e!!iciencies ! "eratins. >Dee&ing E Sc(rader# .01.?.
Ne$ ena%&ers t su""rt A""&e4s &ng9term "&an
A""&e4s in!rastructure (as nt %een !cused n t(eir su""&) c(ain# %ut n t(eir inn5ati5e
creati5e minds and t(e de5e&"ment ! ne$ "rducts and tec(n&gies. Ste5e ;%s $as t(e
arc(itect and master mind %e(ind t(is "(i&s"() and strateg). Wit( (is deat(# A""&e &st its
main &eader and 5isinar). Wit(ut ;%4s guidance and 5isin# A""&e n &nger (as its 6e)
dri5ing !rce. 2(e ne$ CEO# 2im C6 (as di!!erent strengt(s. <His e8"ertise is in "eratins
99 in t(e su""&) c(ain t(at "rduces t(se iP(nes and iPads= >E&mer9'eWitt# .01@?. 2(ere!re#
it ma6es sense t im"&ement a ne$ "&an t(at $i&& !cus n A""&e4s su""&) c(ain management.
C64s 6n$&edge in t(is area is t(e main ena%&er !r t(is "&an. Fur t(er ne$ ena%&ers t (e&"
a&ign t(is &ng9term "&an t t(e rgani3atin inc&ude creating !inancia& strategies t !ree u"
mne) !r ca"ita& e8"enditures# setting u" &ega& teams t de5e&" strng su""&ier cntracts#
creating a mar6eting team t(at $i&& !cus n cst cnscius mar6ets# and ant(er team t !cus
n A""&e4s &$er "rice cst structure. Wit( t(ese ena%&ers in "&ace# A""&e $i&& %e a%&e t entice
its su""&iers $it( ne$ e7ui"ment !r t(eir !actries in e8c(ange !r t(e rig(ts t e8c&usi5e
cntracts. 2(is $i&& a&&$ A""&e t cntr& t(eir su""&) c(ain 5endrs# $it(ut $ning t(em. It
$i&& a&s &ead t(e $a) !r t(em t %u)9ut sme ! t(eir su""&) c(ain manu!acturers in t(e !uture.
F
Ne$ Ena%&ers !r A""&e Inc.
A""&e (as set aside <G10.+ %i&&in= !r ca"ita& e8"enditures in .011 in rder t "re"are !r t(is
tas6 >E&mer9'eWitt# .01@?. A""&e4s ne$ mar6eting teams $i&& %e a%&e t !cus n t(e cst
cnscius custmer and $(at t(e) $ant. 2(is $i&& a&&$ A""&e t "rduce and mar6et &$er
"riced "(nes $it( attracti5e !eatures t(at $i&& entice t(is gru" ! cnsumers.
2(e "rs ! t(is ne$ strateg) are t(at A""&e $i&& (a5e immense cntr& 5er t(eir
su""&iers $(ic( $i&& a&&$ t(em t essentia&&) dictate $(at t(e) $ant. It $i&& a&s a&&$ t(em t
"rduce an iP(ne at a reduced cst s t(e) can "ass t(e cst sa5ings nt custmers. 2(is
s(u&d assist in ca"turing a &arger segment ! t(e cst cnscius mar6et t(e) (a5e %een &sing.
2(e cns ! t(is strateg) are t(at t(e) are using a (uge c(un6 ! mne) t(at cu&d "ssi%&) g t
inn5atin r t(er "ririties. B) !cusing n cst# t(e) cu&d "tentia&&) diminis( t(eir 7ua&it)
as"ect t(at (as %een t(e "innac&e ! t(eir success. 2(e) ris6 creating a su%standard "rduct t(at
des nt meet custmer4s e8"ectatins. 2(is cu&d nt n&) &se t(em custmers and sa&es# %ut it
cu&d diminis( t(eir %rand and re"utatin. S# t(ere are sme maBr issues n t(e &ine $it( t(is
ne$ strateg). 2(e) need t %a&ance t(e cst as"ect $it( t(e 7ua&it) as"ect. I! t(e) g t !ar
$it( cst# t(e) cu&d end u" creating a &$er "riced "rduct t(at is c(ea"# r ! 5er) "r
7ua&it).
A!ter ana&)sis# t(e !ina& recmmendatin !r A""&e is t m5e !r$ard %) signing ne$
su""&ier agreements $it( t(eir 5endrs t rein!rce t(is ne$ su""&) c(ain "&an# %ut 6ee" a c&se
e)e n 7ua&it). Wit( a care!u& assessment ! t(e !eatures t(at are essentia& t t(e ne$ &$er
"riced iP(ne and e&iminatin ! nn9essentia& !eatures# A""&e s(u&d %e a%&e t maintain t(e
7ua&it) ! t(e "(ne# $(i&e a&s cutting t(e "rice. I! A""&e is a%&e t ac(ie5e t(e crrect %a&ance#
t(is ne$ strateg) s(u&d succeed. I! t(e) g t !ar $it( t(e cst cutting# t(e) cu&d ruin t(eir
re"utatin and t(eir %rand.
/
Ne$ Ena%&ers !r A""&e Inc.
Re!erences
A""&e Inc. SWO2 Ana&)sis. >.011?. Apple, Inc. SWOT Analysis# 1910.
CARR# A. >.01@?. WHA2 HO* 'ONA2 DNOW ABO*2 APPLE. Fast Company# >1/1?# @+9@I.
E&mer9'eWitt# P. >.01@?. Inn5atin at 2im C6As A""&e. Fortune.Com# 1.
Internatina& Business# 2. >.011# Fe%ruar) 10?. A""&e IncAs Stc6 Bu)%ac6s Nt Dee"ing
In5estrs Ha"") !r Lng: Inn5atin Sti&& De) in .011. International Business Times.
Dee&ing# '. E Sc(rader# *. >.01.?. Operations for the Executive Suite
Openin! ne" hori#ons for current an$ future pharma lea$ers. Ne$ Hr6 Cit)# NH:
-cDinse) E Cm"an).
P$er# '. >.011?. Inn5atin Strateg): 1 De) 2actics ! 2" Jr$t( Cm"anies. Har5ard
'i5isin ! Cntinuing Educatin: Pr!essina& 'e5e&"ment. Retrie5ed !rm
(tt":CC$$$.dce.(ar5ard.eduC"r!essina&C%&gCinn5atin9strateg)9196e)9tactics9t"9
gr$t(9cm"anies
Reid# '. R. E Sanders# N. R. >.01@?. Operations %ana!ement an inte!rate$ approach >+t( ed.?.
H%6en# N;: ;(n Wi&e) E Sns.
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