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MBA assignment , business model canvas report on apple inc.

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Business Model Canvas Report on Apple Inc.

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MBA assignment , business model canvas report on apple inc.

  1. 1. 1 Business Model Canvas Report on Apple Inc. Executive Summary: This report has been dedicated to discuss the business canvas model of Apple Inc., one of the world’s largest electronics and telecommunication devices manufacturers. In this regard, the key partners of the business have been discussed and along with a list of suppliers as well. The key services provided by such partners include the manufacturing, assembly and distribution of company’s products. The company is creating value through provision of latest technology products and by handling customers’ needs and complaints with the help of establishing Genius Bars. The company distributes its products with the help of different retail stores, retail outlets and online stores. It is operating with many sources amongst them the key sources are the people who are employees of the company, its physical assets and intellectual properties. Moreover, the biggest source of revenues for the company is the sale of iPhones followed by Macs and iPads.
  2. 2. 2 1. Key Partners 1.1 Key partners and their key activities The key partners of Apple include: manufacturers, Apple store Developers, Cellular services providers, Publishers and Music, Television and movie industries. They do a variety of activities for Apple including:  Provision of raw material to company;  Provision of assembly services;  Provision of manufacturing facilities;  Selling of company’s products;  Software Development Here is a list of top ten partners of the company along-with the key activities performed by them for company (CNBC, n.d): 1. AT&T (one of the biggest seller of iPhones); 2. Verizon (one of the biggest seller of iPhones); 3. Foxconn Technology Group (world’s largest electronics manufacturer); 4. TPK Holdings (world’s largest touch panel supplier by volume); 5. Quanta Computers (iMac and Macbook computer manufacturer); 6. Intel (Manufacturer of microprocessors); 7. Samsung Electronics (world’s largest memory chip maker); 8. Toshiba (supplier of LCD panel and flash drivers); 9. Catcher Technology (one of top maker of magnesium and aluminum casings); 10. Wintek (supplier of touch screen); 1.2 Key suppliers The suppliers of Apple are many but top 200 suppliers supply the 97% needs of the company which include assembly, manufacturing and supply of material; with most of them belong to Asian countries. They work under strict rules and regulations to meet and exceed the quality demanded and expected by the customers. Apple has strong and close relationships with its
  3. 3. 3 supplier to provide them the needed support so that they can operate with responsibility. Some key suppliers of Apple include:  AAC Technologies Holding Inc. Taiwan  3M Co. USA  Advanced Semiconductor Engineering Inc. China  Alps Electric company Ltd. Malaysia  Analog Devices Inc. China  AKM Semiconductor Inc. Japan  Asia Vital Components Ltd. China  AT&S China  Catcher Company Ltd. China  Cheng Loong Corp. China  China Circuit Technologies Ltd. China
  4. 4. 4 1.3 Key resources acquired by the Apple from its partners:  Hardware (memory chips, touch screens, flash drives, LCD panels, microprocessors etc.)  Software (designs and programs) 2. Key Activities: The key activities which the company performs include:  Software development,  design,  manufacturing,  distribution and  quality control 2.1 Activities required for Value Propositions: As pointed above, there are a lot of activities performed by the company which ultimately lead to create value proposition for the company. As for instance:  The marketing efforts of Apple are highly unique which contribute in differentiating Apple from the rest of the brands. When it comes to marketing, Apple ignores critique, better understands the demands and needs of customers and is always focused on every opportunity which is created (Moorman, 2012).  It selects best suppliers and works closely with them;  It hires the team of experts for manufacturing and assembling;  It pays most of its attention on quality control department All these activities and there are many other which has led to create value proposition for company.
  5. 5. 5 2.2 The Distribution Channels: The distribution channels of the company are numerous including, online stores, retail outlets, retail stores etc. Being key component of the overall supply chain circle of company, the distribution channel also perform some key activities for the company including:  Storing of products  Selling of products  Providing safety services to products 2.3 Customer Relationships: The company performs a number of activities for maintaining good customer relations. This is the reason, the company has always met and exceeded their demands and has created value proposition in the eyes of customers. The key activities of the company in relation to customer relations include the followings:  Establishment of Genius Bars to deal with customer’s complaints;  Heavy advertisements to provide information to both existing and potential customers;  Product warrantees and guarantees etc. 2.4 Revenue Streams `The company is earning most of its revenues from the sale of iPhones (Statista, 2016). This is the reason, it is paying more attention towards the development and success of every new model of iPhone. Thus, the company has reached to launch iPhone 7 recently which has grabbed the acceptability of a lot of customers all over the world. 3. Key Resources The different resources which the company is using to create value proposition are grouped under the following heads:  Intellectual  Human  Physical
  6. 6. 6 3.1 The Distribution Channels (a key resource for company): The company acquires a number of direct and semi-direct channels to distribute its products which include the followings (Ding, n.d):  More than 300 retail stores in 12 countries of the world;  Thousands of online stores in more than 37 countries for selling hardware and software;  Hundreds of retail outlets all over the world
  7. 7. 7 The structure of company’s distribution channels takes the following form: 3.2 Customer Relationships: Customer handling at Apple has proved to be a great source for company’s success. It is indeed a secret weapon for success of company. In order to deal with customers complaints and to serve them better, various customers handling Genius Bars have been established. Customers bring their products at these Bars and the experts at such places work to fix the issues raised by customers. This is done because Apple knows how to deal with customers. This is the reason the products of Apple are marketed over without their confirmation of being accepted by the customers (Heisler, 2015). Apple Online Store Retail Store Direct Sales force Third Party Wholesalers Final Customers Final Customers Final Customers Retailers Final Customers Added Value Retailers Final Customers Retailers
  8. 8. 8 3.3 Revenue Streams: Revenues of Apple from first quarter of 2012 to 3rd Quarter of 2016 Source: Statista, 2016 The source of revenues for the company is the sale of iPhones in all quarters starting from first quarter of 2012 to third quarter of 2016 whole Mac and ipad alternatively stands at number 2 or 3 in this race. Thus, the company needs to pay and is actually paying more attention towards iPhones segment (Statista, 2016). 4. Value Propositions: The main value propositions of Apple include:  Design  Performance  Brand/status  Convenience/Usability
  9. 9. 9 4.1 Value delivered to customer:  Improved product: Increased storage and better speed are the prime features of Apple’s offerings.  Design: The designing of Apple’s phone, tablet, ipod and Pcs is simple different from other brands which are liked very much by the customers.  Reduced Risk: Warrantees and guarantees offered by Apple on almost all of its products saves customers from risk.  Convenience: the products of Apple are user friendly and every new model of the company for every product i.e. for phones, Pcs, tablets etc. is user friendly. 4.2 Solution to Customers Problems: By providing a variety of products and by continuously improving its offerings through launch of new model for each product (for example iPhone 7 for mobile devices) have helped to meet the growing and unsatisfied needs of customers. Now every new feature which the customers want but it is in their mind, Apple makes it a reality. 4.3 Bundles of products and services offered to each Customer Segment Apple has made different types of market segmentations and delivers goods accordingly. These include (Ali, 2014):  laptops and PCs with more entertainment and fun which are to be used at homes while with more software which are to be used for professional purposes,  Macbook, iPads and iPhones are offered to younger people  For business professionals Mac, iPhones and iPads are offered.  For Upper income group iPhone 6plus and iPhone 7 is offered 4.4 Customer satisfaction: The needs of Apple’s customers are fully satisfied as the company got 80 points out of a total of 100 points in this regard. As per American Customer Satisfaction Index, following is the level of satisfaction of Apple’s customers against its different offerings:
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  11. 11. 11 References: 1. Ali. D, 2014, Segmentation Strategies used by Apple and Samsung, Available at: [Accessed: 19th Sep, 2016] 2. American Customer Satisfaction Index, 2016, ACSI Telecommunications Report 2016, Available at: 2016/acsi-telecommunications-report-2016 [Accessed: 19th Sep, 2016] 3. Apple Suppliers list, 2015, Apple Suppliers Responsibility, Available at: responsibility/b/generic/pdf/Apple_Supplier_List_2015.pdf [Accessed: 19th Sep, 2016] 4. CNBC, n.d, 10 Significant Apple Business Partners, Available at:, [Accessed: 19th Sep, 2016] 5. Ding. D, n.d, Apple Distribution, Available at: [Accessed: 19th Sep, 2016] 6. Heisler. Y, 2015, Apple’s secret weapon: Incredible customer service, Available at: [Accessed: 19th Sep, 2016] 7. Moorman. C, 2012, Why Apple Is a Great Marketer, Available at: marketer/#124202966cb0 [Accessed: 19th Sep, 2016] 8. Statista, 2016, Revenue of Apple by operating segment from the first quarter of 2012 to the third quarter of 2016 (in billion U.S. dollars), Available at: [Accessed: 19th Sep, 2016]