Apple Channel Strategy in Singapore

2286 words 10 pages
INTRODUCTION Apple Inc. designs, manufactures and markets a wide range of personal computers, computer software, and portable music devices. Some of these Apple products include the Macintosh, iPods as well as the iPhones. Apple’s strong value chain is one of the reasons for its success today. Its’ efficient and strong value chain has allowed the company to expand globally with a strong presence in 102 countries. Furthermore, Apple has joined in the process of reintermediation, adding an online store and more resellers into its distribution channel in order to reach more consumers and to boost its sales and profits (Kevin L. Webb, 2001). Fueled by globalization and opportunities presented in the …show more content…
On the whole, Apple has a comprehensive and well-developed distribution channel structure.
PROBLEMS IN APPLE CHANNEL STRATEGY
Lack of control over its ARs
Apple has done well in differentiating and gaining a tight control over its APRs. However, comparing to its APRs, there is a lacked of control over its ARs. Sales personnel in non-APRP might not have adequate knowledge and the competence as compared to those who were given intensive training in its APRP. On the whole, consumers who did not received the expected level of service at the non-APR stores will attribute the bad sale services and dissatisfaction to Apple and not to the non-APR stores. And this will ultimately reflect badly on Apple.
Pricing Issues
Apple has a tight control over its products pricing, leaving as little as only 3% of the profit margins for its resellers to gain from (Ian Fried, 2001). This clearly shows that Apple is at a disadvantage given the margin the ARs can obtain as compared to other brands (For e.g. Dell resellers can earn as high as 5% - 10% for each Dell product sold). The ARs will then prefer to devote much effort to promote competitors’ product with higher margin profits instead of Apple’s.
Acceptance of New Products
Apple is a technology driven company, its constant innovation would mean constant release of new products. The success of the new products would depend on its resellers’ willingness to carry it. Factors that come

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