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Porter’s value chain model

Read or listen to these resources on Dr. Michael Porter's competitive strategies.
Porter, M. E. and Mauborgne, K. R., HBR's 10 must reads on strategy. Ascent Hu. Audio book.
Go to Library Access. In Additional Library Resources, select Skillsoft Books. In the search box enter: HBR's 10 must reads on strategy, select the Books tab, then select: HBR's 10 must reads on strategy.
Kamran, Qeis (2021). Strategic value chain management: Models for competitive advantage. Kogan Page. Chapters 1 - 5
Go to Library Access. In Additional Library Resources, select Skillsoft Books. In the search box enter: Strategic value chain management: Models for competitive advantage, select the Books tab, then select: Strategic value chain management: Models for competitive advantage.
Research a firm that interests you and on which you can obtain sufficient information; find information through sources such as Forbes.com and Businessweek.com, etc., or journal publications.
apply Porter’s value chain model to the firm you selected. Your paper should cover the following:

Discuss what competitive forces entail, the competitive environment of your firm, and the strategy (strategies) that it undertakes.
Explain what value chain means and use it to analyze the company of your choice. Describe the tasks that the firm must accomplish for each primary value chain activity.
Given the nature of its business, how would the firm’s information systems contribute to its competitive strategy,
SLP Assignment Expectations
The paper has proper introduction, discussion, and summary.
The report should address all questions, but they do not need to be in the order the questions are raised. The key is to have a paper that flows well.
References used need to be listed according to the APA7 format.

You have your strategy in place, and you have your prioritized list of projects to pursue. But, wait! What happens if one of the projects proves to be more expensive or less impactful than originally assessed? What happens if one of the strategic pillars is called into question—due to a change in the economy, for example? One of my favorite quotes about planning comes from the famed German military strategist, Helmuth von Moltke, who said, “No battle plan survives contact with the enemy.” You do not have enemies per se, but you do have a variety of realities that may logically require changes to either the strategy or to the project list. What then?
Strategies should be created with the anticipation that they will need to be changed. There are events that may lead to change. And the simple passage of time should lead to changes as well. Examples of events include an economic downturn, but may also include the acquisition or divestiture of a business, a competitor beating you to the creation of a new product, a new market that is to be opened, and the like. Each of these, and other changes like them, should lead to a rethinking of the strategy. Mind you, none of these is likely to require canceling the entire strategy and starting anew, but it will be necessary to at least review the strategic plan to see if there’s anything that’s less relevant (or irrelevant) because of the event.
This is likely to be at the tactic level, rather than the objective level, but the entire plan should be reviewed. The simple passage of time is another reason to review the plan. Many people falsely believe that if there is not an event then the plan should continue to be enacted. As time moves on, aspects of the plan will be accomplished that should be reflected as changes in the plan. Likewise, new strategic opportunities may present themselves. They may need to be incorporated into the plan. And in some cases, you may replace past tactics or objectives to do so. There’s also a tendency to think about the prioritized list of projects (that have been agreed to once the budget for IT is finalized) as set in stone. There are many reasons why a project might need to be canceled, even after it commences. Those might include a significant increase in the cost to develop the project, a reduction in potential value from implementing the project, or the vendor that was to partner with you on it goes out of business. These are three of many examples that would apply. Companies often fall for the sunk cost fallacy. They might say, we've already spent a million dollars on the project, we should see it through to its conclusion. But why throw good money after bad? Cutting your losses and redirecting funds to something of greater value is paramount. It’s also important to note that as projects arise outside of the budgeting cycle, they should be put through the same prioritization criteria, strategic fit, cost/benefit analysis, interdependency analysis, and risk analysis. Again, you may include another category or two of your own choosing.
By using objective criteria to reprioritize, you can help avoid the situation that many CIOs and their teams find themselves in, where someone, especially when they are outside of IT, requests a project mid-year and suggests that it is their new top priority. What they often mean is, “Drop everything and work on this.” By having an objective set of criteria, you can at least speak about how the project ranks relative to projects that are in process, based on those criteria, and counterbalance this argument. Priorities and events will naturally lead to changes in your plan. But by having a sound process in place to ensure that you can handle these changes, you can be flexible enough to seize new opportunities as they arise.

Full Answer Section

Competitive Forces, Environment, and Strategy of Apple Inc.

Michael Porter's Five Forces Framework provides a powerful lens through which to analyze the competitive intensity and attractiveness of an industry. For Apple Inc., the competitive environment is characterized by significant forces:

Threat of New Entrants (Low to Moderate): While the consumer electronics market is vast, the threat of successful new entrants directly competing with Apple's ecosystem (hardware, software, services) is relatively low. This is due to massive capital requirements for R&D, manufacturing, and global distribution, strong brand loyalty, vast existing customer bases, and Apple's proprietary technology and intellectual property. However, niche players or companies with disruptive technologies can emerge, forcing Apple to constantly innovate.
Bargaining Power of Buyers (Moderate to High): Consumers, particularly in the smartphone and PC markets, have numerous alternatives (e.g., Samsung, Google, Microsoft). While Apple cultivates strong brand loyalty, consumers can easily switch to competitors based on price, features, or personal preference. This power is somewhat mitigated by the "lock-in" effect of Apple's ecosystem (e.g., app purchases, iCloud storage).
Bargaining Power of Suppliers (Low to Moderate): Apple is a massive buyer of components (chips, displays, memory), giving it considerable leverage over its suppliers. However, for specialized or proprietary components, suppliers might hold more power. Apple mitigates this by diversifying its supplier base and, in some cases, designing its own chips (e.g., A-series, M-series), reducing reliance on external parties.
Threat of Substitute Products or Services (High): While Apple's products are distinct, substitutes abound. For communication, social media, messaging apps, and web services can substitute for some aspects of Apple's ecosystem. For entertainment, various streaming devices and services compete. For productivity, cloud-based solutions and alternative hardware platforms exist.
Rivalry Among Existing Competitors (High): The industry is intensely competitive, with major players like Samsung, Google, Huawei, and Microsoft constantly innovating and competing on features, price, and ecosystem integration. This rivalry forces Apple to consistently deliver cutting-edge products and services.

Given this environment, Apple primarily employs a Differentiation Strategy. This strategy focuses on providing unique products and services that customers value and for which they are willing to pay a premium. Apple differentiates itself through:

Premium Brand and Design: Unparalleled aesthetic design, user experience, and a strong brand image associated with innovation, quality, and status.
Integrated Ecosystem: Seamless integration between hardware (iPhone, iPad, Mac, Apple Watch), software (iOS, macOS), and services (App Store, Apple Music, iCloud, Apple Pay). This creates a "walled garden" that enhances user experience and customer loyalty.
Innovation: Continuous investment in R&D to introduce groundbreaking features and technologies (e.g., Face ID, M-series chips, advanced camera systems).
Customer Service and Retail Experience: High-quality retail stores (Apple Stores) offering personalized support, repair services, and educational workshops.

While primarily a differentiator, Apple also employs elements of a Broad Differentiation strategy, targeting a wide customer base rather than a narrow niche.

Porter’s Value Chain Analysis of Apple Inc.

The value chain refers to the full range of activities that firms engage in to bring a product or service from conception to delivery, and then to market, providing after-sales support. Porter (1985, as cited in Kamran, 2021) divides these activities into two main categories: primary activities (directly involved in creating and delivering the product/service) and support activities (which underpin the primary activities). Analyzing Apple's value chain reveals how it creates its differentiated value.

Primary Value Chain Activities for Apple Inc.:

Inbound Logistics: This involves receiving, storing, and distributing inputs to the product. For Apple, this includes managing global supply chains for components (e.g., chips, screens, batteries) from hundreds of suppliers.
- Tasks: Supplier relationship management, quality control of incoming components, inventory management, efficient warehousing, and transportation of components to assembly plants. Apple must ensure high-quality components are sourced efficiently and delivered just-in-time to maintain production schedules and quality standards.
Operations: This is the transformation of inputs into the final product. Apple’s operations include design, manufacturing, and assembly.
- Tasks: Product design and engineering (e.g., industrial design, software development), assembly of hardware components (often outsourced to partners like Foxconn under strict Apple oversight), quality assurance at each stage of production, and packaging. Apple's focus here is on precision engineering, seamless integration, and high-quality craftsmanship.
Outbound Logistics: This involves collecting, storing, and physically distributing the products to buyers.
- Tasks: Managing global distribution networks, warehousing finished goods (e.g., iPhones, Macs), shipping products to retail stores (Apple Stores, authorized resellers), and direct-to-consumer shipping for online orders. Efficient and secure global logistics are critical to timely product launches and availability.
Marketing and Sales: Activities related to inducing buyers to purchase the product.
- Tasks: Branding and advertising (e.g., iconic ad campaigns), product launches, retail store operations (providing a premium in-store experience), online sales through Apple.com, and managing relationships with carrier partners and authorized resellers. Apple focuses on creating desire, communicating value, and ensuring a premium purchase experience.
Service: Activities related to providing service to enhance or maintain the value of the product.
- Tasks: AppleCare support, Genius Bar technical assistance and repairs in Apple Stores, online support communities, software updates, and warranty management. Apple's service aims to ensure customer satisfaction, product longevity, and reinforce brand loyalty.

Sample Answer

Strategic Analysis of Apple Inc.: Leveraging Value Chain for Competitive Advantage

Introduction

In the dynamic landscape of global business, understanding competitive forces and a firm's strategic response is paramount to sustained success. This paper will delve into the intricacies of competitive strategy, utilizing Dr. Michael Porter's seminal frameworks. We will examine the competitive environment of Apple Inc., a titan in the consumer electronics and software industry, and analyze its overarching competitive strategy. Furthermore, we will apply Porter's value chain model to dissect Apple's operational activities, illustrating how each primary activity contributes to its value proposition. Finally, we will explore the pivotal role of Apple's information systems in reinforcing its competitive strategy, particularly given the integrated nature of its business.