The value of value chain analysis in transforming your business these models are valuable for representing new and different ways of thinking about the business. The value chain includes the entire range of activities from the beginning to the end involved in bringing the product to the market and the end user. Porters value chain analysis is a tool that can be used to determine exactly how your company goes about the task of creating value. Porter has dedicated much of his career to studying competitive advantage. Harvard business school professor, michael porter, introduced a simple value chain model in his book. We decided to analyze the supply chain strategy of a company that has consistently been on the top ranks of gartners supply chain top 25 ranking apple inc. Applying the three internal analysis frameworks, that is, swot analysis, value chain analysis and resource based view to explain and evaluate aspects of apples internal environment. Given below is the value chain analysis for dell inc. The figure 1 below illustrates the essence of value chain analysis. Value chain analysis value chain divides activities within a firm into two broad categories. The three advantages in it apple iphones design includes the user interface is. Vca refers to the idea that a company is a chain of activities for transforming inputs into outputs that customers value. This case study will show you the analysis of apples supply chain core processes, challenging issues and complexities of its operations. View essay value chain analysis of apple from mgmt 123 at university of the punjab.
Applying the three internal analysis frameworks, that is, swot analysis, value chain analysis and resource based view to explain and evaluate aspects of apple s internal environment. The value chain was first introduced by michael porter during the 1980s in his bestselling book, competitive advantage. Value chain analysis is premised on the belief that competitive advantage can only be understood by looking at the firm as a whole. Sep 11, 2017 the value of value chain analysis in transforming your business these models are valuable for representing new and different ways of thinking about the business. Value chain analysis vca is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation. Apple computer was founded on april 1, 1976, by steve jobs, steve wozniak and mike markkula to manufacture and distribute desktop computers. Apples book value per share for the quarter that ended in dec. One way to do this is to conduct a value chain analysis vca. They, instead rely on the outsourcing of the manufacturing to chinese corporations.
Everything you need to know about value chain analysis. Value chain analysis before making a strategic decision, it is. In addition to examining value chains from a firm level, it is also possible to examine them at an activities level. It is one of the largest companies in the world in terms of market capitalization and sells its products worldwide under various brand names. During the past years, the highest 3year average book value per share growth rate of apple was 3. This book addresses the optimal design of value chains. Swot analysis, value chain analysis, resourcebased. When a company is capable of producing goods at lower costs than the market price or to. One of his bestknown concepts is the value chain, which is used to deliver a product or service to the market and has three key objectives.
The report illustrates the application of the major analytical strategic frameworks in business studies such as swot, pestel, porters five forces, ansoff matrix and mckinsey 7s model on apple. We can also see brilliant use of value chain analysis incase of apple when they provide substitution for their. Apple value chain analysis kindle edition by billy george. The purpose of this paper is to analyze amazons value chain. Value chain analysis evaluates a diverse number of areas within a company. This is why value chains are gaining in importance for companies attempting to deal with these challenges. The book value is essentially the tangible accounting value of a firm compared to the market value that is shown. Porter breaks value chain analysis into five primary activities. Apple value chain analysis mastermindmarketingsite.
The straightforward guide to value chain analysis hubspot blog. Apple outbound logistics involves warehousing and distribution of ready iphones, ipads, mac computers and other products produced by the. Value chain analysis is the method for determining the critical path to enhance customer value while reducing costs. Apple aapl tesla tsla amazon amzn amd amd facebook fb netflix nflx. Apple has built a closed ecosystem, with the company having control over nearly every activity in the supply chainfrom design to retail.
Figure 1 below illustrates the essence of microsoft value chain analysis. In this article well examine examples of how you can perform a firm level value chain analysis. Apples value chain analysis in terms of its inbound logistics, apple inc. Competitive advantage and marketplace differentiation can be found, according to porter, by examining the chain of activities a firm undertakes to deliver value to its customers. From the highlighted chapter case about apple, strengths, weaknesses, opportunities and threats of. It has outsourced its assembly for economic reasons but has also partnered. Module code and name value chain analysis of apple inc. These activities help apple engage in transforming inputs into outputs. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Porters value chain analysis free management books. Apple value chain analysis billy george term paper business.
The consumer electronics and information technology industry has its roots in the initial popularity and spread of basic household items starting in the early 20th. Creating and editing value chain diagrams is fast and easy. During the past 3 years, the average book value per share growth rate was 5. A value chain is a combination of the systems a company or. Valuechain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the business. The company has made a strong return in the recent years. While the computing industry has been seeing a decline in the recent years, in 2017 and 2018, apple again started climbing the charts to restore its position. For example the following is an example of the value chain for copier manufacturer. The concept of value chain was first introduced by michael porter which is at present is increasingly. May 06, 2020 value chain analysis can be complementary to other types of business management efficiency analysis. It also includes support activities such as procurement, human resources management and technological development.
Microsoft value chain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the business. Looking into apple inc growth rates, revenue grew by 0. Some people in the blogosphere said that apple s supply chain is not that complicated. These distinct activities are used daily to generate value greater than the costs. Microsoft contracts with multiple suppliers internationally, as illustrated in figure 2 below. Price to book value is a valuation ratio that is measured by stock price book value per share. Moldovan apple value chain study agricultural competitiveness and enterprise development project aced aced agricultural competitiveness and enterprise development project october 2011 this report is made possible by the support of the american people through the united states agency for international development usaid. Please click growth rate calculation example gurufocus to see how gurufocus calculates walmart stores inc wmts revenue growth rate. This turnaround is brought by the experiences of the company throughout the years by learning with its business mistakes, retaining the core principles, and expanding operations through extensive partnerships. Value chain analysis can be complementary to other types of business management efficiency analysis. Starbucks is one company that is interesting to analyze from a value chain perspective because.
Adding value to a product passing through a chain of activities is called porters value chain after michael porter for his discussion of it in competitive advantage. Apr 28, 2019 apple inc report contains a full version of apple value chain analysis. This assignment examines apple according to value chain analysis. Initially founded by steve jobs, steve wozniak and ronald wayne on april 1, 1976. Find the latest price book value for apple inc aapl. Use a value chain example to improve your business and to build a value chain model. Apple value chain analysis essays and research papers. Microsoft value chain analysis researchmethodology. Sep 03, 2015 dell value chain analysis posted on september 3, 2015 by john dudovskiy value chain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the business.
Supply chain analysis apples products and components are manufactured by a number of suppliers around the world. You can also share files with non smartdraw users by simply emailing them a link. The concept of value chain analysis was introduced by michael porter in the 1980s. Swot analysis, value chain analysis, resourcebased view. Most of the businesses and organizations do have some activities or. Apple is responsible for designing, developing, and selling consumer electronics, computer software, online services and personal computers. As you might have guessed, the value chain is a set of activities that will lead to the creation of value. Apple is well known as technology giant and an innovative company that has brought several superhit products to the market including ipod, ipad and mac. Value chain analysis before making a strategic decision, it is important for apple to understand how its activities or products create values for customers. Apples book value per share for the quarter that ended in mar. During the past 5 years, the average book value per share growth rate was 1. For example, apple beside look its external advantages, its internal advantages also need to be look for the design of apple iphone, it has concentrate three main internal advantages on it. Moreover, the report contains analyses of apple leadership, business strategy.
This case study will show you the analysis of apple s supply chain core processes, challenging issues and complexities of its operations. The central causes of this are specific customer demands, global sourcing opportunities and noneconomic objectives that require a variety of refined cooperation processes. It was michael e porter of the harvard business school who introduced the concept of value chain. Value chain analysis is a strategy tool used to analyze internal firm activities. Value chain analysis of the apple can be better understood with the help of some examples. Value chain activities are not different from one another. James hogan for understanding apples supply chain with focus on apple iphone, supplier selection and global supply chain management. Starbucks is one company that is interesting to analyze from a value.
Price book value is a widely used stock evaluation measure. What are the primary activities of michael porters value chain. Starbucks also uses apples ibeacon system, wherein customers can. The chain analysis inbound logistics on apple value. From the highlighted chapter case about apple, strengths, weaknesses, opportunities and threats of apple can be clearly noted. Value chain analysis smi strategic management insight. By using value chain analysis, apple can select and source premium quality raw material and develop customer loyalty on the basis of it.
Some people in the blogosphere said that apples supply chain is not that complicated. It can also use value chain analysis to develop brand identity. Vca refers to the idea that a company is a chain of activities for transforming inputs. Apple inc report contains a full version of apple value chain analysis. Value chain analysis free essay example studymoose. For proper study of this organization according to value chain analysis one must understand what value chain analysis is. Apple inc aapl fundamental analysis, stock research. Analysis of the supply chain strategy of apple inc. Use a value chain example to improve your business and to build a value chain model search this site. You can apply the same method to get the book value growth rate using book value per share data. Analysis of apple according to value chain analysis. The paper provides a value chain analysis of amazon inc. It measures firmlevel analysis, which measures the business unit, it also looks at primary activities such as inbound logistics, operations, outbound logistics, marketing and sales. External analysis of apple inc 10072 words bartleby.
For example, apple products success mainly comes not from great product. Analysis of apple according to value chain analysis marketing. Value chain analysis demand chain analysis identification of customer, market, wants, and needs market opportunity analysis identification and analysis of value drivers value proposition value proposition as related to demand chain value proposition as related to supply chain supply chain analysis value. Apple value chain analysis essays 893 words bartleby. Value chain for a copier manufacturer adapted from porter, 1985 cpp insight although the value chain has been in the public domain for over 20 years, its not often used expressly as part of the strategy development process. And a value chain analysis gives businesses a visual model of these activities. The term value chain mainly refers to the set of activities on the basis of which a company working in a particular industry can avail a competitive benefit to create the shareholder value. Apple s complex supply chain is attributed to the fact that this fortune 500 company has multiple suppliers located in different parts of the world primarily in united states, china, japan and taiwan.
Value chain analysis of apple module code and name value. According to the wiki dictionary, a value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market michael e, 1985. As part of her analysis of apples stock, she wanted to look at the companys supply chain to see if she could gain some insight into the pros and cons of apple as a key holding in bxes fund. Since the mid1980s, michael porters value chain analysis i. If its your first time performing this type of analysis, this. Michael porter introduced value chain models in his book. Want to know our editors picks for the best books of the month. It highlights the explorations of internal analysis of a chain of business activities and explores the role and contribution of organizations resources corresponding to primary and support activities in a costeffective way to gain cost advantage lynch, 2000. Apple has built a closed ecosystem, with the company having control over nearly every activity in the supply chain from design to retail.