Why Apple’s product magic continues to amaze – skills of the world’s #1 value chain integrator

Abstract

Purpose

Apple’s amazing run of blockbusters – iPhone, iPad, iPod, iTunes, multiple iterations of the Mac computer, and going all the way back to the Apple II – has created a fan base of consumers willing to pay premium prices and produced enormous corporate value. This case aims to look at the strategies, value chain integration skills and management practices that underlie Apple’s ability to bring its designs to commercial stardom and propel shareholder value.

Design/methodology/approach

The case examines two related skills that the company has developed since the late 1990s that are critical complements to Apple’s design talents: its ability to combine “build, borrow and buy” strategies and its world-leading abilities as a value chain integrator.

Findings

Apple has uniquely sophisticated “build, borrow and buy” (BBB) expertise throughout its management, going all the way up to its CEO Tim Cook. The company’s lengthy success record proves it knows when and how to develop products and components internally, when to ally with other firms and when and how to acquire and integrate other companies.

Research limitations/implications

This case is based on publically available sources.

Practical implications

Despite working with such a large and powerful set of vendors and partners, Apple harvests much of the value in the relationships.

Originality/value

The case shows how corporate leaders and personnel throughout the company maintain a systematic view of customer value, the value chain that delivers that value and the competitive and social contexts that shape value demands, so that they can communicate and coordinate activities of multiple vendors throughout the ecosystem rather than simply manage a series of one-to-one relationships.

Citation

Mitchell, W. (2014), "Why Apple’s product magic continues to amaze – skills of the world’s #1 value chain integrator", Strategy & Leadership, Vol. 42 No. 6, pp. 17-28. https://doi.org/10.1108/SL-10-2014-0074