Apple Inc Case Study
Introduction
The assessment of the Operations & Supply Chain Management module 0302361 is by both assignments ( group and individual ) and examination. The individual assignment comprises written essay providing you with the opportunity to research and reflect on the application of the concepts and techniques studied in this module, to current organisational practice.
Aim of this Assignment
The aim of this assignment is to provide you with the opportunity to:
evaluate critically the applicability of module concepts to specific organisational contexts
select and use appropriate tools, models and frameworks to develop a critical analysis of a business
situation
communicate your analysis clearly and confidently through a written report
work autonomously, managing the process of study and prioritising appropriately
manage the research process to gather required information and data with minimum of guidance
The Task
You are required to carry out and report on a review of a topic from the Operations & Supply Chain Management. This will include an assessment of the importance of the topic to organizations today, a review of current thinking on the topic, examples of practice in the topic area and recommendations for practitioners.
The output of this assignment is:
The Report
The report should cover the following aspects:
Assessment of the relevance and importance of the topic to organizations today (5 marks).
Review of current thinking in the topic area to include a critical review of the key concepts, theories and frameworks used by academics and practitioners active in the topic area and integration of topical issues in
the area to illustrate applications of the concepts developed (5 marks).
Recommendations for practitioners based on your analysis of theory and practice (5 marks).
General guidance
You are required to review current thinking in your topic area. This will allow you to identify theories, models and frameworks that are relevant to your chosen topic. Such theories, models and frameworks should be assessed critically in your review of current thinking and appropriate tools then applied to the ‘real-world’ examples in the topic area.
Remember you are working to a word limit. Long descriptive answers with little supporting data are not encouraged. Your assignment requires careful identification and analysis of relevant issues.
All tables and graphics should be captioned and referred to in the main body of the text. Referencing should use the APA referencing system.
Word count
Your assignment should be about 1700- 2000 words in length Use of appendices
You are advised to be cautious when including appendices in assignments. There are no specific criteria for marking or mark allocation available for appendices, so the assessment process focuses on the appropriate use of appendices. When deciding whether or not to include appendices, consider the following points:
Appendices should add value or detail to the discussion and analysis undertaken in the main body of the assignment.
They offer students the opportunity to give greater relevant and appropriate detail to support the main analysis and discussion.
The inclusion of appendices should not be viewed as an opportunity to include anything that cannot fit in the word count.
Appendices should always be referenced at the appropriate point within the discussion in the main body of the text.
Solution
Apple Inc.’s Strategy
Introduction
The achievement of organizational success is greatly determined by the effectiveness of the strategies and efficiency in their implementation. Companies that have achieved global competitiveness owe their success to the above. Apple Inc., a global leader in designing and developing computer software, consumer electronics, and a provider of online services has greatly developed since it was founded in 1976 due to the effective implementation of a sound corporate strategy. The management and leadership of the Company created a strong organizational culture aligned with its objectives and strategy. These have enabled the significant growth of the Company making it the largest technology company by revenue and total assets and a global leader in phone manufacturing. According to its 2016 report, Apple Inc. recorded an annual income of $233 billion (in terms of revenue) and was value at over US$700 billion (Apple Inc., 2016). The discussion of the Company’s corporate strategy and its success is critical for understanding the influence of organizational practice, culture, and the effective implementation of strategy. This report discusses the influence of capacity planning in Apple and outlines its importance in organizational development. Further, it gives succinct recommendations for practitioners in line with the theory and practice.
Capacity Planning
Every company focuses on the achievement of greater market share, the improvement of its profit-efficiency and the generation of shareholder wealth among other critical objectives. The achievement of these goals is determined by the effectiveness and efficiency of a company’s strategy and its implementation. According to Das (2015), companies focus on meeting the demands and needs/wants of the customer in order to ascertain customer satisfaction. However, the market and consumer demands for certain products are constantly changing. Capacity planning is an essential strategy which plays a key role in the determination of the company’s production capacity required for meeting the changing demands. The strategy focuses on outlining the capacity of the company to achieve the set goals in accordance with the changing demands of its products. As Bunn and Oliveira (2016) assert, companies integrate design capacity, a component of capacity planning into their strategies to outline the work and resources required for the production of specific number of units within a specified period. This allows companies to predetermine their ability to meet the demands in terms of capital and resources.
An efficient capacity planning, as Das (2015) posits, allows effective capacity in an organization. Companies implementing effective capacity know the maximum amount of work and resources required for the completion or production that meets the set goals without compromising quality, customer relations, or misusing corporate resources. The major concern is production of products that meet the needs of the consumers and services that ensure customer satisfaction. Producers and providers of consumer electronics, mobile products and technologies, software, and online services should prioritize capacity to ensure customer satisfaction and profitability. Capacity planning, in this a case, allows a company to beyond the existing constraints of limited resources, quality concerns, material handling, and delays among others. Most importantly, companies in the IT sector integrate capacity planning and management into their corporate strategies for the estimation of storage, software, hardware, and the connection of infrastructural resources, to ensure that the products and services produced/provided meet the demands and tackle the concerns of the consumers (Hesseldahl, 2007).
Apple Inc. has
The Apple Inc. focuses on the effective implementation of its strategic capacity plan. The implementation of the strategy is enhanced by the Company’s product portfolio analysis, which proves critically essential for the determination of the effective use of its resources. The management of Apple Inc. must allocate and apply its resources with the consideration of its strategy and organizational objectives. The strategic capacity plan enables the Company to allocate or reallocate its resources effectively and thus ensures cost effectiveness and the achievement of maximum profit efficiency. Additionally, according to Mallin and Finkle (2011), Apple continues to invest heavily in innovation to ensure cost effectiveness and allow the production using as minimal resources as possible for manufacturing more products. Further, the innovation allows unibody construction that attaches simplicity in the products while ensuring sophistication and customer satisfaction. The importance of the strategy in the development of the Company’s production efficiency and profitability is undeniable.
The effective implementation of the strategic capacity plan of the Apple Inc. allows it to achieve precision, the desired sophistication of its products, and customer satisfaction. The implementation of various plans such as the creation of the unibody continues to serve as a major competitive advantage for Apple. The reflection of this was evident in the financial report of the 1st quarter of 2013 (Metal Bulletin Daily, 2013). Following the integration of the innovation into the MacBook, the Company recorded increased profits due to improved sales. The Company sold more than 75 million units of iOS devices. The idea enhances the simplicity of its products but maintains their sophistication, which help in attracting and maintaining loyal customer base. The strategic implementation of capacity plans makes it possible for companies to increase their production rates and improve their profitability. According to Metal Bulletin Daily (2013), the effective implement of strategic capacity plans plays a significant role in the enhancement of cost-effectiveness in production and pushes companies to develop and implement innovative ideas that improve efficiency.
Effective capacity planning and management assists organization to minimize the costs of production while maintaining high-quality levels. According to Das (2015), a key importance of effective capacity plan implementation is the ability to allow companies integrate measures that minimize expenditure by limiting the resources. The implementation of a strategic capacity plan in the production of Apple products has allowed the development of highly efficient processes and systems. The Company, according to Finkle and Mallin (2011), uses an innovative cooling system which ensures minimal use of water. The system ensures a reduction of up to 20 percent of water consumption in the site in Maiden, North Carolina alone. Further from the abovementioned, the application of the strategy allows Apple to influence its consumers into conservation of water and the promotion of sustainable development through its Clean Water Program. The implementation of the capacity planning strategy in any organization serves a greater role in influencing its overall development through increased profitability and organizational efficiency (Das, 2015).
The efficiency of Apple’s capacity planning strategy is evident in its constant focus on capacity development and improvement. The leadership of Apple Inc. continues to invest in expanding its operations and production through system development, the improvement of its production efficiency, and continued investment towards the implementation of the strategy. For instance, in 2015, the Company announced plans of expanding its production capacity to resolve and meet the demand and supply concerns facing its flagship services and products (Hason, 2015). The objective to meet the increasing demand through the improvement of the production capacity of its production plant in Ireland shows its continued investment in capacity planning and implementation. Apple intended to meet a rising demand/supply issue for various products it promotes in the global market. While the Company invested over US$334.3 million for the development of the plant in Cork, Ireland, it continues to invest in its constant development to ascertain capacity improvement in line with the changing demands for the various products produced in the plant for the global market (Apple Inc., 2016) (Hason, 2015).
According to Das (2015), the decision to invest in capacity planning is influenced by various factors among them the facilities available, the input, work processes, staff, and supply chains. These aspects influence the implementation of the strategic capacity plans significantly. As a global leader in terms of revenue, Apple faces less challenges in the implementation of the capacity strategy. As such, the company continues to experience the benefits of effective implementation of the strategy. In the last few years, Apple Inc. has recorded significant success, which is greatly influenced by the strategic capacity management and planning. Continued higher profit margins push the Company to invest more in higher capacity to ensure effectiveness in the implementation of the strategy even when the market and customers present low capacity expectations (Das, 2015).
Further from the aforementioned, decisions concerning capacity planning are greatly influenced by the product’s accounting performance. Apple focuses on a constant evaluation and analysis of its market, the performance of its products and services, and their profitability. While high margins influence its increased investment in capacity planning and implementation, lower margin and demand uncertainties play a significant role in the process. High demand uncertainty serves an important role in the promotion of capacity investment in the Company (Das, 2015). Additionally, the management ensures additional investment in the implementation of capacity where products and services record lower margins (Apple Inc., 2016).
Recommendations
In the implementation of strategic capacity plans, a Company should:
- Focus on an in-depth analysis on internal factors such as its facilities, the essential inputs, the work processes, the employees, and the existing supply chains.
- Evaluate its margins to ensure efficiency in the implementation.
- Determine the reasons for capacity planning. The prioritization of efficiency, quality improvement, and profitability is critical.
- Estimate the capacity the company requires relative to the future demand, and
- Determine the sources of capacity and wait for the visibility of demand or act prior with efficient analysis.
Conclusion
Capacity
planning plays a significant role in the enhancement of organizational development.
The effective implementation of the strategy and its integration into the
greater organizational strategy is critical. Companies implement this strategy
to determine their ability to produce and meet the demands of the market for the
products. In the process, the consideration and prioritization of quality is of
essence. The managerial leadership of an organization should ensure the
efficient utilization of resources and effective production without
compromising quality and customer relations. The application of this strategy
continues to influence the development and success of Apple Inc. The effective
implementation of the strategy among other critical strategies have propelled
the Company to global success. Currently, the Company is a global leader in the
production of consumer electronics, computers, mobile phones, and software
among other products and services. As such, there is a need for companies to
focus on the implementation of the capacity planning strategy. Implementation
should start with a critical internal analysis, extensive research on the
market and the changing trends therein, and the changing demands for the
products a company deals with.
References
Apple Inc. (2016, May 20). Financial Information. Retrieved from Apple.com: http://investor.apple.com/financials.cfm
Bunn, D. W., & Oliveira, F. S. (2016). Dynamic capacity planning using strategic slack valuation. European Journal Of Operational Research, 253 (1), 40-50.
Das, A. (2015). An Introduction to Operations Management: The Joy of Operations. New York: Routledge.
Finkle, T. A., & Mallin, M. L. (2011). Apple Inc.: product portfolio analysis. Journal of The International Academy for Case Studies, 17 (7), 63-74.
Hason, S. (2015, May 11). Apple Inc. (AAPL) All Set To Expand Its Irish Plant’s Capacity. Retrieved from Business Finance News: http://www.businessfinancenews.com/22398-apple-inc-expands-its-irish-plant-capacity/
Hesseldahl, A. (2007). The Future of Apple. Businessweek Online, 12.
Metal Bulletin
Daily. (2013). Feature: Steve Jobs — the man who made aluminum sexy. Metal
Bulletin Daily, (363), 1.