Apple Inc. Case Study

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Apple’s MacOS and its hardware can only be used to manage their products, and most of the Apple’s programs cannot be used with other computer brands creating an inconvenience for the customers. Apple releases a new iPhone and iPad every year and these products are criticized for the lack of improvement they have compared to their previous versions.

3.3 Opportunities

The increase of internet users in the next decade will be crucial for Apple. Today, more than 20 billion devices are connected to the internet, the devices are expected to grow by 50% to 30 billion by 2020 (EMC, 2014). The worldwide market for the IoT is expected to grow from $655 billion USD to $1.7 trillion by 2020 (Norton, 2015). Due to the further declining sales of the iPhone and iPad, Apple has an opportunity to focus growing their service segment. The main products such as iTunes Store®, App Store®, Mac App Store, TV App Store, iBooks Store™ and Apple Music® grew by 22% between 2015 to 2016 (Apple, Apple Annual Report, 2016). Apple has a huge amount of cash reserve; they should continue to invest this cash in research and development to stay ahead of their competitors. Apple needs to work creating strategic alliances with other companies, they can use the technology from other companies and focus on Apple has an opportunity to have their devices be compatible with the different computer brands. The iPhone and iPad video formats need to be compatible with brands other than Apple computers.

3.4 Threats (MISSING - Jordi)

4.0 Company Strategy (Adrian)

Apple’s overall business strategy is to provide the highest level of user experience to its customer base through software, hardware, and services (Apple, 2016). Apple accomplishes this by developing and designing its hardware, operating systems, services, and application software to provide solutions and products with seamless integration, best in class ease-of-use, and innovative design (Apple, 2016). Apple’s current business strategy also involves expanding its delivery of applications and content through its internet services (Apple, 2016). Apple believes in the use of skilled sales staff to provide an outstanding customer experience, and this aligns with Apple’s strategy to expand its retail footprint, online stores, and third-party network (Apple, 2016). Apple understands the competitive environment they are in and are committed to continued research and development, advertising, and marketing to increase sales and provide for innovative solutions (Apple, 2016). Apple’s global management is separated into regions such as the Americas, Europe, China, Japan, and Asia Pacific that are managed separately to handle the unique markets and provide an enhanced localized customer experience (Apple, 2016). Apple sources its components from one supplier, to few suppliers, to many suppliers depending on the component and Apple’s logistics division is outsourced as well (Apple, 2016).

On the sustainability side, Apple’s overall strategy is to make the best environmentally friendly products globally (Apple2, 2017). Apple’s primary priorities are to use renewable energy sources as much as possible, implement high levels of energy efficiency at their facilities and for their products, conserve precious resources, and use safer environmentally friendly materials in their products and processes (Apple2, 2017). Apple is committed to asking tough questions, and handling large problems with the goal of solving these challenging issues with urgency (Apple2, 2017). For example, some of the items Apple is looking into is if they can power a global business with the sun, wind, and water (Apple2, 2017). Apple is also looking into if they can get 100 percent of their supply chain to move to renewable energy, and if they can stop mining permanently (Apple2, 2017). Apple wants to use only 100 percent recycled paper for their packaging and look at methods to improve on the world’s materials used (Apple2, 2017). Some highlights from their 2016 sustainability initiatives include the fact that 96 percent of electricity from their global facilities was derived from renewable energy (Apple2, 2017). Apple is 100 percent renewable in their data centers and 24 countries (Apple2, 2017). The environmental testing lab has been expanded to continue to find any toxic substances in their product (Apple2, 2017). Apple has made a commitment to a closed loop supply chain to use recycled or renewable resources (Apple2, 2017). For example, one of the recycling initiatives includes melting down iPhone aluminum enclosures to make computers for use in their factories (Apple2, 2017). One can see that Apple has shown a long-term commitment to sustainability and is committed to continuous improvement by reducing, reusing, and recycling where possible (Blackboard, 2017).

5.0 Supply Chain sustainability

Apple reported about 29.5 million metric tons of greenhouse emissions in 2016. Break-down of all the different segments that contributed to the total 2016 CO2 emissions showed that Manufacturing was the biggest contributor with 77%, followed by 17% from Product usage, 4% from Transportation, 1% from Corporate Facilities and 1% from Recycling activities. Almost two third of the 77% of the carbon emissions from Manufacturing was from the electricity used to make Apple products. Electricity is used to process raw materials, make parts and assemble products. Within manufacturing, integrated circuits comprised of 35% of the CO2 emissions closely followed by 29% from Aluminum.

5.1 Manufacturing: Integrated Circuits (Bhaskar)

The first step in the process of making Integrated Circuits that power Apple products is to manufacture silicon wafers, which provide the “base” for nanoscale electronic devices to be fabricated. “Converting quartz sand to electronics-grade silicon consumes tremendous amounts of energy and involves highly toxic intermediate compounds” (DERBYSHIRE, 2016). It is very challenging for Apple to control the different processes of the supply chain due the complexity of suppliers spread across the globe.

Process improvements to ensure higher yield and optimization of energy and water use will help sustainability. Resources utilized to produce wafers that are scrapped or devices that fail functional test are wasted. Hence, yield improvements and more rapid yield learning will help fab houses minimize their carbon footprint and improve its bottom line as well.

Apple can reduce the impact of carbon footprint from energy-intensive IC fabrication process by ensuring that its suppliers are sourcing renewable energy