November 4, 2018

Apple’s Business Process Analysis

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INTRODUCTION

Business process of an organization is an activity or a group of activities aimed at the achievement of organizational goals. Business process management (BPM) is a systematic approach to manage and improve these processes. Different businesses in different industries like retailing, manufacturing, advertising, etc. have their own business processes, helping them to achieve their goals. In this present paper the business process followed by the world’s leading technology company, Apple.

BUSINESS PROCESS AT APPLE

Apple, being a leading technology company in the world, follows a unique business model of making it simple for people to use the existing technologies in the market (Francis 2009). Apple focuses on producing the best consumer electronic products available in the market which can be sold for the highest profit margins available in the industry. For this purpose, Apple hires some of the world’s best designers and engineers. Below is the brief description of business process followed by Apple:

Apple identifies products where other producers have focused on adding more and more features rather than making it simple for people to use the product. While the addition of more features can create more demand in the initial days, the same can make the product overly complicated and customers will find it difficult to use it. For E.g. addition of new features to Microsoft’s Word created additional demand in the initial days, but made the product more complicated for general users later. The resulting complication in products makes it difficult to be sold in the mass market.
The second step involves determining whether Apple can come up with a new product which can be made dramatically simple for users and capture the important features which were developed by other users in the industry.
The third step involves identifying whether the product/platform to be developed by the company can create a compelling competitive advantage to the company in the long term. This involves checking whether any of the existing vendors provide an integrated platform for devices and other services (Francis 2009). Does the existing vendors provide a decent platform? Will the platform when created by the company itself can lock-in the customers to the company in the long term? The second question is crucial for Apple as it focuses on locking in the customers in the long term with its products like iTunes and the iPhone.
Once the product/platform has all the pros which are listed above, Apple sets out in designing the prototypes with emphasis on simplicity and sophistication which are the hallmarks of the Apple brand. Other than the basic functions which are considered to be indispensable in the product, Apple generally emphasizes on trading-off design, simplicity, and user friendliness over the addition of more and more additional features. For achieving this objective, Apple employs the best product designers in the world (Heisler 2013). Focus on these elements makes all the Apple products as potential IT lust items and fashion accessories for the consumers. The mantra is to come up with something radically different for which the consumers will be willing to pay a high price premium. Apple then releases both the product and the platform at the same time, so that the consumers can be easily locked up with each other and with the company for a long term.
Production of the products is mostly outsourced to the companies in countries like China where it can do for a fraction of the cost of that of producing in the US or Europe.
The business process of Apple also involves revising the products at regular intervals (mostly yearly) depending on factors like product cycle and cost. New releases incorporate the technological advances in the market. But Apple also ensures that updated releases also come up with some additional improvements like improved fit-and-finish, looks, fashion, etc.

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BURLTON IGOE DIAGRAM OF THE BUSINESS PROCESS AT APPLE

Burlton’s IGOE model, developed by Burlton (2001) is the first detailed method for capturing and documenting process information (Long 2012). IGOE is an acronym for the key components of the business process, viz. Inputs, Guides, Outputs, and Enablers. Below is the diagram of the Burlton IGOE model diagram of Apple’s business process elucidated above:

The platforms created by Apple like its iTunes music store and App Store can create a compelling competitive advantage to the company in the longterm as they can lock-in the customers with the company’s products like iPod and iPhone. These platforms created by Apple make it easy for consumers to buy the required media files and apps easily from the company. Audio files and Apps through these platforms can’t be played on other devices made by other vendors. Other vendors like Google and Microsoft too have comeup with their competing platforms like Play Store and Zune Marketplace offering similar products and services. These competing platforms are good and got a good customer base in a short period of time. But these platforms are still picking up momentum and can’t give tough competition to Apple.

SLACK 4V MODEL

Below is the positioning of the Apple’s business process according to Slack’s 4V model (Slack et al. 2006):

4 V’s	Apple’s Business Process
Volume	Low. Even though Apple’s products are mass produced, the business process discussed above doesn’t focus on mass production of Apple’s products. It mostly deals with issues related to designing and producing a limited number of well designed and high quality products to suit the needs of consumers.
Variety	Low. Unlike other consumer electronics companies, Apple designs and produces a limited, but highly targeted number of products to its consumers. For E.g. it has just two different types of iPhones in the market at any given time.
Variation in Demand	High. Business process of Apple deals with a high variation in the demand for the products of Apple as consumers’ demands keep on changing depending upon the latest technologies coming in the market.
Visibility	High. Even though the internal workings of the business process is not visible to the consumers, the end products/platforms designed by Apple are what to consumers.

TYPE OF BUSINESS PROCESS

The business process which we have discussed is a management process. Management process involves issues like corporate communications, budgeting, strategic planning, and corporate governance. Since the business model discussed mainly deals with designing and producing innovative products, the model deals with strategic planning issues like identifying products which are not satisfying the needs of customers adequately and coming out with good alternatives. Business process of Apple also deals with other strategic planning issues like focusing on issues like design and userfriendliness of products to the consumers.

REFERENCES

Burlton, RT 2001, ‘Business process management: Profiting from process, Pearson Education, New York.
Francis, S 2009, Apple and business process management. Available from: < http://www.bp-3.com/blogs/author/sfrancis/ >. [11 March 2014].
Heilser, Y 2013, Apple hires top designer from Nike. Available from: < http://www.tuaw.com/2013/09/29/apple-hires-top-designer-from-nike/>. [11 March 2014].
Long, KA 2012, ‘What is an IGOE?,’ Business Rules Journal, vol. 13, no. 1, pp. 10-22.
Slack, N, Chambers, S, Johnston, R & Betts, A 2006, Operations and Process Management, FT Prentice Hall, London.