Which of the following exemplifies a characteristic of the apple iphone’s core product component?

Under a Creative Commons license

Open access

Highlights

•

Evaluates Apple Inc.’s post-2003 business model.

Apple's physical supply chain demonstrates the shortcomings of its business model.

Apple's content supply chain has become dependent on extensive legal protection.

Apple exerts control over retailers using its brand power and own retail stores.

Apple's multi-channel platform allows it to “own the consumer”.

Abstract

This paper uses a business model framework to analyze the main limitations of Apple Inc. post-2003, a significant turning point in the company's history. As such, we move beyond an exclusive focus on what makes Apple unique or different by evaluating the mundane and out-dated elements of its business model. To do so, we examine the end-to-end supply chain, from source to store, to present a more holistic evaluation of the Apple business model. Drawing on the existing literature, we argue that the quintessential element of the Apple business model is its ability to ‘own the consumer’. In short, the Apple business model is designed to drive consumers into its ecosystem and then hold them there, which has been hugely successful to date and has allowed Apple to wield enormous power in the end-to-end supply chain. We demonstrate this through a detailed evaluation of Apple's physical and content supply chains and its retailing strategy. Moreover, we find that the very business processes that enable unparalleled corporate control bring with them new problems that Apple has thus far been unable, or unwilling, to adequately address.

Keywords

Business model

Supply chain

Apple

Retail

Dr. Johnna Montgomerie is a Research Assistant at the Center for Research on Socio-Cultural Change (CRESC), University of Manchester. Her main research interest is in Anglo-American finance, in particular as it relates to households and recent publications include: “America's debt safety-net” in Public Administration (available for early viewing on website) and with Dick Bryan, Randy Martin, Karel Williams “An important failure: knowledge limits and the financial crisis”, in Economy and Society (41, 3) pp. 299–315.

Samuel Roscoe is currently a PhD candidate at Manchester Business School where he is studying how open innovation in supply networks can enable environmentally and socially responsible capabilities. Sam received his master's degree from the Cranfield School of Management in supply chain and logistics in 2010. He has worked in the supply chain field for 14 years where his most recent role was overseeing the set-up and daily operation of adidas’ London 2012 Olympic Games warehouse.

Copyright © 2013 Elsevier Ltd.