Sustainable Global Supply Chain issue of Apple
The contemporary issues are defined as any type of opinion, idea, event or can be a topic within a specific type of subject which are relevant with the present time (Wellington 2015). This type of issues is discoverable in any type of matter. This type of issues can affect the society of present days. This type of contemporary issues is faced by many big organizations. One prior example of this type of organization is the Apple Inc. Apple is one of the biggest organization in the world but still facing many types of contemporary issues. There are total three biggest issue which are currently faced by Apple. The first issue is with the sustainable global supply chains which has affected the supply chains of the Apple Inc. vastly. The second and the third contemporary issues are the economic impact of the Brexit and other contemporary organizations respectively. In these three issues the most problematic issue is the contemporary organization.
In this paper the above mentioned three contemporary issues will be elaborated briefly and how this issues impacted Apple Inc. will be discussed. Considering the issues how Apple is responding to those issues will be evaluated in this paper. Following that how the media and the commentators are interpreting the response of the organization will be discussed briefly. Further some key recommendation will be provided to the organization to respond on those contemporary issues.
While examining the contemporary issues faced by the Apple Inc., the sustainable global supply chain supply is one of the main issue of them. The main impact of the supply chain issue is the on the Apple Inc. is directly related with the sales of the organization. The global supply chain issue directly impact the sales because the production line is totally relies on the supply chain of the raw materials (Humphries 2013). One of the possible reason for this issue is the revolutionary products of the Apple Inc. Due to this revolutionary product line-up, the availability of the raw materials is less from the suppliers as the inventory of the suppliers need to be updated according to the Apple Inc. Apple uses OLED displays for its most selling products which are the iPhone and the iPad series and this OLED displays comes from the Samsung and the LG Electronics (Li, Tran and Halfond 2014). Both of the organization are the market rivals of the Apple Inc. and also, the Samsung and the LG Electronics uses the OLED displays for their phones. Thus from my personal point of view this makes the supply of the OLED screens for the Apple tighter and the sustainable global supply chain for the Apple is not maintained.
Maximum of the iPhones of the Apple are assembled in the China, and recently the Apple faced a ban issue on China due to some patent violation which has affected the supply chain of the Apple Inc. in a broad way (Xing 2014). Also, another issue faced by the Apple Inc. regarding the global supply chain is the business separation from the Qualcomm Inc. Till the date Qualcomm was the modem supplier of the Apple for their iPhones but recent lawsuit case has separated them and Apple is facing supply related issues regarding the modem for their iPhones and iPads. The other challenges faced by the Apple regarding the sustainable global supply chain is are the:
- Global economy affection.
- The total inventories of Apple exceeds the demand which is anticipated previously.
- There are very limited source for some components.
- Apple is dependent on the logistical services which is provided by some other partners.
Responding technique of Apple to Global Supply Chain Issue
As this supply chain related issues impacted the sales of the Apple Inc. they must take some appropriate actions to address the issues. To mitigate some of the issues related with the global supply chain Apple is adjusted operating model of the OEM (Lacerda, Xambre and Alvelos 2016). In this new operating model the manufactures are now only responsible for the productions where as in the previous cases the OEMs were responsible for the both procurement of the materials and the parts and for the production. This new model has given Apple more control over their production line and they are able to manage their production line perfectly. While considering the modem supply issue with the Qualcomm, the Apple Inc. has found an alternative partner which will now supply the modems for their iPhones and iPads and this new modem supplier for the Apple is the Intel. To address the ban issue in the China Apple has made some small changes to the software of its iPhone and iPads. This will substantially help Apple to remove the bans from sales and will normalise the supply chain. Besides that one of the main techniques which are used by the Apple to respond to the global supply chain issue is the promoting products. As per me promoting the products will help the Apple to attract new customers on the market which actually improves the overall supply chain management. For promoting the products Apple can adapt the marketing styles such as digital ads, facilities instalment and offer strategy which are potentially attract most of the customers in the market, thus the supply chain management will be improved as the consuming end will be active all the time.
As per the interpretation and the evaluation of the major stakeholders and the media the Apple Inc. has chosen a correct way to address the issues of the sustainable global supply chain. By changing the operative model of the OEMs, Apple is now capable to control its own supply chain and the production lines. Also, the stakeholders has evaluated opting Intel as a modem supplier in positive way because Intel is one of the most reliable modem supplier in this segment and this company is also capable to provide next generation 5G modem to the Apple (Nekovee 2014). Thus the overall decision made by the Apple Inc. to mitigate the issues of the global supply chain was good enough. The stakeholders of the Apple is also very much impressed with the current strategy of the marketing as this attracts the new customers which keeps the flow of the supply chain perfectly.
The Brexit is a term which is used for describing the exit of the United Kingdom from the European Union (Goodwin and Heath 2016) in the year of the 2017.
The incident of the Brexit has impacted various countries and various organizations in the world which includes the Apple Inc. also. The Brexit is a serious concern for the Apple because Apple was having the several U.K. based offices for smooth operation in the European territory (Khan, Alam and Alam 2015) but the brexit separated U.K from the European Union which was huge loss to the Apple. Due to this reason Apple faced various issues in the United Kingdom territory which are the pricing issues and the sales related issue.
Evaluation of the Commentator on Apple’s responding technique
Pricing Issue: According to my analysis pricing issue occurred within the Apple Inc. due to the brexit because the British Pound was all time low in 30 years on that time (Hobolt 2016). As the value of the British Pound decreased the overall economy of the United Kingdom is also decreased. Thus it also impacted the economy of the Apple in the region of the United Kingdom. Apple was facing losses due the declination of currency in the United Kingdom. Due to the brexit the value of the euro also fell down which again affected the pricing of the Apple devices in the European Countries.
Sales Related Issue: I have also found that this brexit issue has impacted the sales of the Apple products in this reason. As the value of the British Pound become less the purchase power of the British citizens automatically lowers (Clarke et al. 2017). This has again impacted the economy of the Apple as sales percentage becomes lowers in this region. A large group of the consumer was making delay in purchasing the gadgets of the Apple as they were waiting for brexit situation to be normal. Apple was having total 39 operative retail store in the United Kingdom which has faced losses in this short period of brexit due to the lower sales issues.
Responding to Pricing Issue: The pricing issue of the Apple due the brexit was a huge concern. The Apple Inc. was running through a loss due to the lower value of the British Pounds. To address this issue there was only a single way available to the Apple which was increasing the prices of their products. Still, increasing the pricing of the products was not the ultimate solution for the Apple to address this issue. It was very much vital for the Apple to find a perfect balance of the price hike and the demand of the customers which can manage the bottom line after the issue of the brexit. Though the price hike was the only solution for the Apple, they approached it in a different style. Instead of raising the price of the existing products Apple smartly increased the price of the App Store which doesn’t affected the consumers in broader way (Lee and Raghu 2014). Also, they launched new products with higher price tag instead of increasing the price of the existing products. Actually, this strategy helped Apple to avoid the criticism of the customers.
Responding to the Sales related issue: To fix the sales related issue the Apple was totally dependent on the United Kingdom government as Apple was not able to do something directly for increasing the sales percentage. The only thing they could have been done is the lowering the prices of the product but lowering the price will be a loss for the Apple (Sanchirico 2014). So, it was not an optimal solution. Instead of that they started the exchange program in which someone can exchange their old products with new products by adding some money. This strategy helped Apple to increase the sales percentage slightly.
Economic Impact of Brexit on Apple
As per the media and the stakeholders, the strategies taken by the Apple was good enough to respond to the challenges. The pricing issue of the products due to the brexit was bit challenging for Apple as they needed to increase their profits without disturbing the current market price. The media was interpreted the current strategy taken by the Apple and evaluated it as a good strategy as Apple didn’t hiked the price of their existing products in the market even after the economic issue of the brexit (Hern 2017). The stakeholders were also evaluated it as a good strategy as Apple was able to still generate profits by increasing the prices of the App Store without increasing the prices of the existing products which may can be reason of the customer dissatisfaction.
The strategy of fixing the sales related issues is evaluated by the commentators and it was kind of satisfactory as the sales percentage increased slightly. Though the sales percentage increased slightly, considering the market situation of the brexit it was still a good idea.
From my personal experience the Apple Inc. is facing a huge contemporary organization issue which is the rise of OnePlus in the smartphone industry. Due to the OnePlus Apple is now facing huge competition in the market which is affecting their sales percentage.
The contemporary organization issue which is entry of the OnePlus in the smartphone industry is mainly affected the iPhone sales of the Apple (Sharma 2018). As the iPhones is the most selling device of the Apple it is one of the main concerned issue as the OnePlus is directly competing with the iPhones of the Apple. The market consumers are preferring the OnePlus smartphones over the iPhones in the current market situation as the brand OnePlus is offering more powerful hardware and features in a reasonable price tag when compared with the iPhones. Thus the in such type of competitions the iPhones are lagging behind due to the high price tag of its devices (Ames 2013). This directly affecting the sales percentage of the Apple and its iPhone line-ups. With the OnePlus there are also other contemporary organizations like the Samsung with many innovations which is again affecting the sales percentage of the Apple products.
With the OnePlus and Samsung there is another contemporary organization which is Qualcomm. Qualcomm is not the direct market competitor like the Samsung and the OnePlus but Qualcomm managed to directly impact the market of the Apple by taking legal action against them (Shrout 2018). The Qualcomm recently beaten Apple in some patent lawsuit cases in Germany and China which lead to ban on the iPhones sales in this two countries. Again in some different way the sales of the Apple products are affected. Thus the contemporary organizations are mainly impacting the sales of the Apple Inc.
According to me, Apple Inc. needs to take some serious step with their product line-ups to respond to the contemporary organization issue which are the OnePlus, Samsung and the Qualcomm. Apple can respond to this type of contemporary issues in two way. First they can lower the prices of their devices or secondly they can implement some innovative ideas which can finish the market competition for a while. In this situation Apple did not opted the first option as it can lower their profits, instead of that they responded to this issue by implementing some new and unique ideas in their products which actually finished the market competition for a while. Apple first introduced notch display in their phones which made the phone more attractive and it was the main attraction for many customers (Tsujimura 2017). Also, Apple introduced 3D facial recognition system which is considered as the next gen security systems (Drira et al. 2013). Apple has successfully eliminated the bottom bezel of the phones by implementing curved OLED screen which other manufactures failed to do (Smith et al. 2014). This innovating things has made the iPhones different from the other phones and Apple has gained good position in the market by responding to those contemporary organization issue (MacKinnon and Fiala 2014). To address the ban issue, Apple has taken legal steps. In such cases Apple has done minor changes to their business procedures according to the court order which resulted termination of the ban and Apple was able to execute its normal business processes.
Pricing Issue
As per the media and the stakeholders the responding technique of the Apple to the contemporary organization issues are great. Using the innovations Apple has successfully eliminated the market competition of the other brands. The stakeholders evaluated this technique as a very well developed idea. This is because Apple was able to hold its high price tag in an extensive competitive market and this is the main reason behind the huge profit of the Apple. The stakeholders also evaluated that the Apple needs to continuously implement this type of innovative ideas to their products otherwise it will be problematic for the Apple to sustain in this competitive market with high price tags.
Conclusion:
From the above discussion it can be concluded that the contemporary issues are very much vital for the any type of organization. This contemporary issues can create problems for the organization in the several sectors which includes supply chain issues, pricing issues and sales related issues. This type issues also affects the economy of the organization. To analyse the problems regarding the contemporary issues Apple Inc. is chosen here. From the Apple Inc. it is assessed that this organization is currently facing three main contemporary issues. This three main issues are the sustainable global supply chain related issue, economic impact of the Brexit issue and the contemporary organization issue. The contemporary issue regarding the supply chain has created problem in the supply chain of the Apple Inc. The main reason behind the issue with revolutionary products is the availability of the raw materials was less, which impacted the production of the Apple. Apple successfully tackled the issue by altering the working model of the OEMs. In the case of the Brexit issue Apple faced problem with the pricing and the sales of their products. Apple smartly managed the pricing issue by increasing the price of the App Store which avoided the customer dissatisfaction. The Apple also faced some issues with the contemporary organization which has impacted the sales of the Apple. Apple implemented innovative ideas to boost their sales though they are carrying high price tags. This technique helped Apple to finish the market competition and gain a good position in the present competitive market.
The Apple Inc. faced various types of contemporary issues within their organization and they were also able to successfully address those contemporary issues. Though the Apple Inc. has successfully addressed the challenges still some recommendation can be given to them to mitigate this issues in the future more effectively. The recommendation are follows:
- To maintain the sustainable global supply chain it is recommended to implement top management support. In this management support, integrated resource allocation system will be present. Also, shared information system and financial support system will be integrated.
- Another key factor for maintain the global supply chain is focusing on what the market wants. Thus it is recommended to focus on the demand of the market.
- Due to the Brexit issue Apple faced sales and pricing related issue in the United Kingdom. To mitigate this type of pricing issues it is recommended to implement the dynamic pricing which will automatically adjust the price of the products depending the market situation. As the dynamic pricing will be activated, the consumers will be able to understand the reason behind the price hike or the price cut. Thus it will be able to avoid unnecessary dissatisfaction of the customers.
- Contemporary organization issue vastly affects the sales of the Apple products. In such cases Apple might consider the perfect mixture of the pricing with the innovation. Thus it is recommended Apple to continuously implement innovations within their products with effective pricing for outclass its market competitors.
References:
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