Apple Business Strategy in China
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Transcript of Apple Business Strategy in China
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Apple Business Strategy in China
New York University
Fall 2012
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Team A
Jessica Aguirre
Lauren Challman
Lukas Karwowski
Manas Puhan
Partha Mitra
Overview
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High-level agenda
Product Lifecycle
Business Advantages in China
Strategy & Constraints
Question & Answer
Conclusion
Overview
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Why Apple ?
Founded April 1, 1976
Revenue US$ 108.249 billion
Net Income US$ 25.922 billion
364 retail stores in 13 counties
Estimated value US$ 626 billion
US$108 billion Growth in 2011
Largest publicly-traded corporation in the world by market capitalization
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Apple’s Growth in Greater China
Revenue US$ 7.9 billion
20% of company's net revenue
Up from 9% a year ago
There is tremendous opportunity for companies that understand China –Tim Cook, Apple CEO
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Market Share Of China in Tablet PC
78.3 % Market Share in Tablet PC
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Product Lifecycle
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Product Release
Product Maturity
I-phone sales
Stabilized market
Pressure to lower manufacturing costs
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Business Advantages in China
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Speed and flexibility of Chinese workforce
Tough for US employers to compete
230,000 employees working 6 days a week
Group atmosphere versus individual drive
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Cheaper Materials and Proximity to Supplies
Materials are all made in China
Cheaper and faster
Less waste
Less risk and challenges
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Cheaper Production Costs
More money in consumers’ pockets
Put back into their country’s economies
$6.5 billion in extra consumer value
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Promotes growth in Chinese consumer market
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Chinese Government Incentives
Tax exemption of 15% Chinese tax treaties growing
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Research and Development In China
600,000 engineering graduates per year
Salaries are cheaper
China’s Five-Year Plan to promote R&D
Relocation allowances
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Strategy and Constraints
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Outsourcing
Political
Reputation
Apple Response
New Opportunities
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Slow Movers
Google’s move to China
lessons
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Loose lips sink ships
In China, Apple runs a tight ship with no loose lips
FoxConn's Operational Methods
Security CardsFingerprint Recognition Scanners
Metal Detectors World Class Facilities
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Operational Tactics
Distributes projects among several manufacturers
Suppliers are brought
in at the absolute last minute
No reliance on any single supplier
Strict confidentiality with penalties
Assembly line workers have little clue on the finished product
Custom parts prevents reuse
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Apple leading the way
Stay Hungry Stay Foolish
Stay Globalized Stay in Business
Leveraging increasingly globalized economy
Adaptability and lack of complacency
Hidden opportunity and tremendous success
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Question and Answer
Contact:
Lukasz Karwowski: [email protected]
Lauren Challman: [email protected]
Jessica Michelle Aguirre: [email protected]
Manas Puhan: [email protected]
Partha Mitra: [email protected]
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New York University
70 Washington Sq South,
New York City, New York, 10012Image Credit: Apple Inc.