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Apple Distribution Strategy

Journal Review

By: Eka Darmadi Lim NRP: 3094802 CP: Y


International Business Networking Universities of Surabaya 2011

Company Profile Apple Inc. (NASDAQ: AAPL; previously Apple Computer, Inc.) is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. Apple software includes the Mac OS X operating system; the iTunes media browser; the iLife suite of multimedia and creativity software; the iWork suite of productivity software; Aperture, a professional photography package; Final Cut Studio, a suite of professional audio and film-industry software products; Logic Studio, a suite of music production tools; the Safari internet browser; and iOS, a mobile operating system. As of August 2010[update], the company operates 301 retail stores in ten countries, and an online store where hardware and software products are sold. As of May 2010[update], Apple is one of the largest companies in the world and the most valuable technology company in the world, having surpassed Microsoft. Established on April 1, 1976 in Cupertino, California, and incorporated January 3, 1977, the company was previously named Apple Computer, Inc., for its first 30 years, but removed the word "Computer" on January 9, 2007,[9] to reflect the company's ongoing expansion into the consumer electronics market in addition to its traditional focus on personal computers. As of September 2010[update], Apple had 46,600 full time employees and 2,800 temporary full time employees worldwide and had worldwide annual sales of $65.23 billion. The distribution strategy Initially Apple wanted to control it all with an iron fist. In an effort to expand its sales, they have been slowly adding other distribution channels with high sales volume. Such is the case with AT&T, Best Buy and now Wal-Mart. Wal-Mart Stores Inc. said on Friday it will start selling Apple Inc. iPhone on Sunday. Wal-Mart plans to sell the black 8-gigabyte iPhone 3G model for $197. The 16-gigabyte model, in black or white, will be priced at $297. All of the phones require a new two-year service agreement from AT&T Inc. or a qualified upgrade. Despite the 2009 recession, Apple made significant alterations to its products and also the company decided to change its strategy in 2010 to compete with Google, Microsoft and other companies. There is a possibility that the company will open the iPhone to various companies, also it will release an iPod Touch that will come with a camera, broadening its retail footprint, launching the tablet PC as well as releasing the Beatles catalog to iTunes.

AT&T is the only provider of the iPhone in the US that has brought both advantages and disadvantages as well. The smartphone achieved big success in sales. It became known that the smartphone traffic has augmented by 5,000 percent for the last three years. Apple also has its network of stores, which gives it a major advantage in distribution. "There's no question Apple has done something that will help extend their leadership position," said Tim Bajarin, president of Creative Strategies, a research firm in Campbell. "If I'm another vendor, I'm concerned about Apple's extremely solid operating system and their retail presence. That's where it's going to be hard for any of these guys to compete." The company also buys components in bulk, so it is able to keep the price lower than its rivals. The huge promise of the Apple brand, of course presents Apple with an enormous challenge to live up to. The innovative, beautifully-designed, highly ergonomic, and technology-leading products which Apple delivers are not only designed to match the brand promise, but are fundamental to keeping it. Apple is expanding and improving its distribution capabilities by opening its own retail stores in key cities around the world in up-market, quality shopping venues. Apple provides Apple Macexpert retail floor staff to selected resellers' stores (such as Australian department store David Jones); it has entered into strategic alliances with other companies to co-brand or distribute Apple's products and services (for example, HP who was selling a co-branded form of iPod and pre-loading iTunes onto consumer PCs and laptops). Apple has also increased the accessibility of iPods through various resellers that do not currently carry Apple Macintosh systems (such as Harvey Norman), and has increased the reach of its online stores. How to transport the apple product?

Apple use the airplane to transport their goods, to make the transportation cost cheaper they use to create the smaller package each product. They use to maximize the space inside the box, so they can reduce the size of the box, the old model to transport the goods, need 4 planes, but the new package can save a lot. The picture above explain the old model need 4 airplane but the new model need just 3 airplane. Summary To distribute their product apple use the contract system, usually they corporation with the largest operator cellular to distribute their product, because in this way they can reach larger market and also optimize the phone function. And also distribute to their retail store bundle with the operator package, and to transport the apple product to the retail store, they use the airplane, and also the train to deliver their product to the retail store.