Apple’s use of supply chain as a strategic weapon

A New York Times article (24 Oct 2011) describes Apple’s low price strategy – iPhone 4GS priced at $199, iPads at $499 etc, with competitors barely managing to match prices for similar or lower specification products. The article suggests that this is a shift from the early pricing strategies for the iPhone, whose high prices provided a window for Android operating system based phones to gain market share. Is Apple using volume commitments to enable low costs for itself while driving up costs for competitors ? Is Apple’s volume growth rate and aggressive product introduction incenting suppliers to accept associated rampup costs and risk ? Is the consumer acceptance of frequent product changes enabling Apple’s global supply chain to deliver products at low prices ?  Or is it Apple’s strategy of significant component commonality across all of its products the key to its supply chain success ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , , , . Bookmark the permalink.

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