Owning the consumer—Getting to the core of the Apple business model |
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Authors: | Johnna Montgomerie Samuel Roscoe |
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Affiliation: | 1. Centre for Research on Socio-Cultural Change (CRESC), The University of Manchester, 178 Waterloo Place, Oxford Road, Manchester, M13 9PL, UK;2. Manchester Business School, The University of Manchester, Booth Street West, Manchester, Greater Manchester M15 6PB, UK |
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Abstract: | This paper uses a business model framework to analyze the main limitations of Apple Inc. post-2003, a significant turning point in the company's history. As such, we move beyond an exclusive focus on what makes Apple unique or different by evaluating the mundane and out-dated elements of its business model. To do so, we examine the end-to-end supply chain, from source to store, to present a more holistic evaluation of the Apple business model. Drawing on the existing literature, we argue that the quintessential element of the Apple business model is its ability to ‘own the consumer’. In short, the Apple business model is designed to drive consumers into its ecosystem and then hold them there, which has been hugely successful to date and has allowed Apple to wield enormous power in the end-to-end supply chain. We demonstrate this through a detailed evaluation of Apple's physical and content supply chains and its retailing strategy. Moreover, we find that the very business processes that enable unparalleled corporate control bring with them new problems that Apple has thus far been unable, or unwilling, to adequately address. |
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Keywords: | Business model Supply chain Apple Retail |
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